Why is the UK property sector racing ahead in London?

Monday 19th October 2009

The UK property sector would appear to have recovered in general but the London market is already back to pre-recession levels after such a short space of time. Despite the fact that the financial climate in the UK is still very much overcast it would appear that homebuyers are prepared to "bid up" for properties in and around the London area. So can this continue?

The truth is that seeing London property prices racing so far ahead has obviously given the impression to some people that the recession is well and truly over. However, if you take a step back from the situation and review the UK economy as a whole, the unemployment market, the mortgage market and the shortage of quality property in the UK, we have the potential of a nightmare scenario. What if the UK property market were to collapse in 2010? Are UK mortgage companies taking too much of a risk?

There is talk of mortgage arrangements at five times income in some areas of the country which is basically a recipe for disaster. Quite how we have arrived back at this situation so quickly is a mystery to many people and one which will concern the UK government and UK regulators.