Prime central London’s property market is in a bubble, albeit a modest one, and is now vulnerable to a correction that could see prices tumble by up to 20%, according to a new research report by Development Securities and Fathom Consulting.
While economic drivers partially explain London’s residential property price escalation in relation to the rest of the UK, “only around one half of the further substantial appreciation of PCL property prices through 2012 and into 2013 can be justified by economic fundamentals. On that basis, we [Fathom Consulting] find some risk that a modest bubble has started to form in the PCL market.”
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