Despite the economic downturn, thousands of people are moving to live in London, one estate agent has said.

Ed Phillips, lettings director of Foxtons, said it was because of a lack of housing stock.

"Despite the doom and gloom about the current economy there are still high volumes of people moving to London and relocating here," he said.

Rental prices are rising and Mr Phillips is experiencing a level of interest in properties not usually seen until the year's busier periods.

"On average there are have about four to five applicants for each property, so we are seeing things go quickly," he said.

The Halifax found house prices in March were only 1.1 per cent higher than 12 months earlier, following years of house price inflation.

A separate index by Primelocator.com revealed "increasingly constrained supply and strengthening demand had combined to produce record average weekly rental values".