London is set to be the busiest mortgage market in all of the UK over the next few years, a study has concluded.

According to research carried out by mform, 35 per cent of Londoners are expecting to take out a mortgage between now and 2010 despite the ongoing rises in house prices across the capital.

The latest house price report from Nationwide revealed that the average cost of a home in the city now stands at £292,409, a 15.7 per cent rise on the previous year.

Francis Ghiloni, mform business development director, said: "The cost of servicing a mortgage has been rising steadily, and this is set to continue as many people are forced to borrow more in the light of rising property prices."

The study also found that the north-east of England and East Anglia are also likely to see high levels of lending over the next three years, with 32 per cent and 31 per cent of people in these areas stating that they intend to take out a mortgage.

The continued growth of house prices in the south east and the capital was one factor cited by the Halifax as it recently revised its forecast for house price growth for 2007 to six per cent from four per cent.