Property prices across south west Hertfordshire are set to rocket by more than 20 per cent over the next five years.

Homes in Watford, which already cost on average £239,316, will rise by 21 per cent by 2011 to almost £290,000, according to research carried out by Your Mortgage magazine.

Prices in Hertsmere will increase by 21.3 per cent, in Dacorum by 19.9 per cent, and in Three Rivers, the property market will swell by 23.6 per cent.

Estate agents, however, believe prices will rise by 40 per cent in the same period.

Melanie Cowell, of Your Move, which has offices in the area including Croxley Green, said: "Prices have risen by ten per cent since the beginning of the year. The demand for property is outstripping stock by a ratio of five to one of buyers to properties. It's slowing off now and we expect a lot of property to come on the market next month. That will level it off."

She believes prices will rise by a further five per cent by the end of the year, unless interest rates go up.

She said: "They need to hit eight per cent to adversely affect the property market, but that would have significant impact on the economy."

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