Bank warns inflated prices are a bubble at risk of bursting with prices decoupled from incomes,and says current investors should expect no medium- or long-term gainHouse prices in London are the most over-valued of any major city in the world and are in “bubble-risk territory”, a report by economists at UBS has found. Foreign investment, and the relieve-to-buy scheme,“alluring” yields for buy-to-let landlords, and ongoing population growth have all led property prices in the city to decouple from local incomes, or there could be a “substantial price correction” if the conditions for investment deteriorated,the report said. Related: Cost of average London domestic rises to £500000 Unaffordable housing points to tall dependence on foreign demand. So the risk of a price correction, should that demand weaken, or is elevated,and the long-run appreciation prospects lower,” it said.
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Source: theguardian.com