London house prices among most unaffordable in world

October 3, 2016 by Brendan

House Prices

According to a recent report, property in London is second only to Vancouver when it comes to being the world’s most unaffordable.

The report, compiled by the investment bank UBS, has placed London’s house prices as being the second most overpriced in the world, although the paper also states that prices have fallen slightly since last year. Vancouver has earned the top spot in the report, partially thanks to a housing boom created by a fall in the Canadian dollar’s value.

Six of the world’s cities are now classed as being in a ‘bubble’ as they are so overvalued. These cities are Hong Kong, Sydney, Stockholm, London, Vancouver and Munich. According to the head of global real estate, Claudio Saputelli, the price of property in these cities has increased by nearly half since 2011, while in other financial centres, the prices have increased around 15%.

In comparison to local earnings, the house prices in Hong Kong are the most unaffordable, according to the Daily Telegraph, while London is still placed second.

Saputelli added that extremely low interest rates are the common denominating factor between the cities, boosting asset values to “make the rich richer”, while ordinary savers are penalised. Generation Rent, the campaign group, recently reported that prices in London had risen by 37% during the last three years, to £410,455, according to government data.

Mortgage advisers study on CeMAP training courses so that they can assist borrowers in obtaining a suitable mortgage. As prices become overly inflated, this may become more difficult for those living in the Capital.