"London is a world city where overseas investors see real estate as a safe asset at a time when safe assets are increasingly scarce"
- Miles Shipside, Rightmove director and housing-market analyst
Last week Britain's leading economists claimed that even despite risks of a growing housing bubble, the housing market remains highly divergent and two-speed market, as the pace of growth in property price in the capital is several times higher than in other regions. Following these comments, a report from the Rightmove Plc. showed that home prices in capital accelerated at an unsustainable rate this month, on the back of strong overseas demand that added more pressure to a market already short of supply. Values in London rocketed 10.2%, or 50,484 pounds, hitting an average of 544,232 pounds. Estate agents already warned that property supply in London is reducing to almost nothing. The constantly rising property values in London are suggesting buyers are returning to the market after the summer slowdown, with a 15% jump in sellers this month, up from a 12% drop a month earlier. In comparison, there is no risk of a housing bubble outside of London. Reports also showed than prices in East Midlands, Yorkshire and Humberside, East Anglia and South-east advanced 4.1%, 2.6%, 2.3% and 2.3%, respectively. Furthermore, prices in West Midlands and Wales fell 3.2% and 1.7%, respectively. Hence, prices in 2 of the 10 regions fell in October, while five regions registered annual declines. The pace of growth in all regions but London and East Midlands are significantly lower than the pace of growth in consumer prices; however, the fact the market is running out of available houses for sale are raising concerns values will continue climbing higher.
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