Boom for London and south-east predicted

London and the south-east of England have been identified as the UK's likely property hotspots during 2008.

According to a study carried out by the Homebuyer and Property Investor Show, as many as 70 per cent of investors regard the two regions as potential boom areas over the next 12 months.

The region was recently found to be the most popular domestic immigration destination, and this demand for property, coupled with a shortage of supply, led investors to argue the area will see the best house price increases of 2008.

Along with this imbalance of supply and demand, belief in London and the south-east was also fuelled by the improved transport links, wealth, foreign buyers and regeneration across the area.

The introduction of Crossrail and the expansion of the east London railway will also prove beneficial in the longer-term.

"Historically, London and the south-east have usually been the top UK property performers, often regardless of the overall national house price trend," said Andy Smith, managing sirector of 1st Property Investment.

"It is encouraging investors still recognise the significant potential for capital growth even in a more nationally subdued market.

"Strong demand from homebuyers and renters is still there; this is particularly true within regeneration areas where new infrastructure projects are taking place."

Merseyside was ranked as the second-most promising area for property investment due to its role as the European Capital of Culture for 2008.

However, the area still came far below London and the south-east, with only ten per cent of investors confident in its performance.