A new report released by the EY Item Club has warned that London is facing a property price ‘bubble’ that could cause the cost of housing to soar to three times that of other areas in the UK by 2018.

The paper revealed that while UK house prices have risen at a rate of 8.4% over the last 12 months, the average price of property in London has increased by 11%. In fact, the difference is so great that our capital city is dragging up the national average property price.

If property prices continue to grow at this rate, by 2018 a typical London property will cost £600,000 – 3.5 times the predicted average price in Northern Ireland and 3.3 times that in North East England.

Business Secretary Vince Cable is one of many senior figures to agree with the report, warning that soaring property prices could recreate the same economic conditions that caused the recession in the UK.

However, Mark Carney, governor for the Bank of England, has disputed these claims, stating that housing costs are a low level threat to Britain’s economic stability.

Whatever the future of the UK’s housing market, one thing is for sure: if you’re investing in a house then you need to protect your building and its contents to avoid future financial outlay.

For a no obligation home insurance quotation from Coast call Freephone 0800 614 849.

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