Home Residential PropertyLondon at risk from "devastating housing bubble"

London at risk from "devastating housing bubble"

by LLP Editor
30th Oct 15 9:36 am

London now the second-most unaffordable city in the world

London is facing a housing bubble risk as itโ€™s โ€œby far the most overvalued market in Europeโ€, UBS has warned.

UBSโ€™s Global Real Estate Bubble Index, which looked at 15 cities including Hong Kong, Sydney, New York, San Francisco and Geneva, found that London could see a โ€œsubstantial price correctionโ€.

The report pointed out that London property is now the second-most unaffordable of the 15 cities, behind only Hong Kong.

It also found that between 1985 and 2009, whenever the index exceeded 1.0 โ€œa real price correction of on average 30% began within three years 95% of the timeโ€. Thatโ€™s why London is at risk of a housing bubble as the capital rated 1.88 on UBSโ€™s bubble index.

Claudio Saputelli, one of the authors of the report, said: โ€œA mix of optimistic expectations, favourable economic fundamentals and capital inflows from abroad has caused valuations to soar in certain cities in recent years.

โ€œLoose monetary policy has prevented a normalisation of housing markets and encouraged local bubble risks to grow.โ€

ย 

Now read:

Andrew Parker MI5

MI5 boss: Islamic State planning mass terrorist attacks on London

By Harry Cockburn

Intelligence service also admits hacking IS communications for first time

Google Balloon project loon

Project Loon: Google on track to have 300 automated balloons beaming internet to earth

By Harry Cockburn

Company aims to provide continuous internet in some areas by next year

Leave a Comment

CLOSE AD