Real Estate: The biggest risk to the UK economy?

How high can raise the price of Real Estate in London? This question is now the many.

If you look back over the last 10 years the fall in property prices in London during the credit crunch, it seems only a temporary aberration and not collapse, whom everyone feared. Today, the record low interest rates and growing consumer confidence in the economic recovery of the UK, did rise in house prices is almost unshakeable.

However, there are worrying signs of cooling. It follow for further raise? Or on the London property market formed a “bubble” that is about to burst?

Elite sector of the market “ballooned” in part due to large-scale investments from Russia, the Middle East and China, as investors sought “safe haven” for their capital, and sterling remained low. It replaced the wealthy British buyers of Mayfair and Kensington in a more modest, such as Battersea.

Outside the high-end segment, on the London property market a crisis of affordability, as it is almost impossible for young families to purchase a house without the help of parents. Price of a house today, more than the average annual wage men are more than five times that dooms the family to a lifetime lease.

Sale of property in London is becoming increasingly competitive, the most popular profession in the UK in 2012 was a real estate agent.

The government planned to partially solve this problem by constructing new housing estates in Kent, but few Londoners want to live in this county.

Is also growing concern about the situation of those who have taken shelter, the average cost is £ 492,000 ($ 821,400), on credit. Taking into account the huge number of mortgages tied to the base rate of the Bank of England, and the fact that interest rates will soon be increased, the monthly cost of these people will be a few hundred pounds.

It is not surprising that Mark Carney, Governor of the Bank of England called the housing market “the greatest risk to the housekeeper of the country.”

It is likely to become one of the most important factors in the general election to be held next year. If the middle class will continue to see their kids ‘crowd out’ the real estate market with high prices, it is unlikely to give your vote for the candidate of the Conservative Party in May next year. While the opposition Labor Party is trying to attract voters by talking about the housing crisis. London real estate market may soon become a “battleground” for votes.

Real Estate: The biggest risk to the UK economy?