The report found that while the UK economy as a whole slowed to a 1 per cent in the first quarter, the housing market has maintained its momentum.
This was attributed to not the combination of low interest rates, low unemployment, rising population and a limited supply of new housing
stock.
It forecasts that base rate increases in the second half of the year could slow the rate of house price inflation, although the annual rate of house price inflation in the UK is expected to be close to 10 per cent by the end of the year.
This was despite a a prediction that the Monetary Policy Committee will
increase base rates in quarter point stages every two months to a peak of 4.75 per cent the end of the year.
Next year, it predicts that the base rate will peak at either 5.75 per cent or 6 per cent in the fourth quarter of 2003.
