Soaring house prices in London have fuelled a “bubble-risk” that has left the capital most in danger of a correction out of all major cities in the world, UBS has warned.
The Swiss bank said foreign demand from investors seeking safe-havens, the Government’s help to buy scheme and “alluring yields” on buy-to-let investments had all “propelled London house prices to new heights” as demand continued to outstrip supply.
UBS said “caution” was warranted as London now risked a “substantial price correction should the fundamentals for estate investment deteriorate”.
“London is by far the most overvalued market in Europe, at risk of a bubble as a result of explosive price behavior since 2013,” the report warned.
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