‘Unreal’ property market in capital soars by 13.8% in a year.
The average London house price surged to a record £414,356 last month as a new report said the capital’s boom is now the biggest property bubble in history.
Experts said the London market is now “detached from reality”, as prices rocketed by 13.8 per cent in the year to February — the fastest rate since 2007 — according to latest Land Registry figures. An explosion in the number of first-time buyers scrambling on to the ladder and easier access to mortgages have contributed to heating up the market.
Another factor is the tidal wave of foreign cash drawn by London’s status as the world’s premier “safe haven” investment. The latest increase means that the typical London home has gone up in value by just over £50,000 in a year, far outstripping the capital’s average salary of £36,781 in 2013.
But it immediately revived fears that the “dysfunctional” London property market is now out of control, with frenzied buyers creating a new bubble that will end in a disastrous crash when interest rates start to go up.