BBC News reported online today that the London housing market has formed the world’s biggest house price bubble, according to the Swiss bank, UBS.
It said the ratios of property prices to incomes, and property prices to rents, have reached all-time highs. And it warned that London house prices have become more “decoupled” from household earnings than anywhere else in the world. More than any other big city, the capital now faces the risk of a “substantial” price correction.
Real house prices, after adjusting for inflation, have soared by almost 40% in London since the beginning of 2013, said UBS.
That makes London one of the most expensive cities in the world.
Amongst other findings in the report:
- London house prices are, in real terms, 6% above their 2007 peak. This compares with a national drop in house prices of 18%
- The decoupling of the London market is “even more drastic” considering that real average earnings have fallen by 7% since 2007.
Let us be blunt about this. It’s not rocket science and the facts are something most of us have known for a long time. The London market twists all the national averages and does little to truly promote the UK property market. It may bring overseas attention but the London market is simply not reflective of what is happening elsewhere. This is why we and may others have been saying that the London market is not the place to invest if you are looking for steady realistic growth, genuine discount and rental yields that appeal to the savvy buy to let property investor. #northernpowerhouse!
Recent Comments