Is There A Property Bubble In London? Will It Burst?

London’s property market has been attracting investors for years. It has proven to be a profitable investment, generating large quantities of returns – but, according to the UBS, this tendency might change soon.

Is London’s Property Market Approaching A Correction?

London and Southeast, in particular, are commonly the most popular areas for those looking to invest in property in the United Kingdom – and for good reason. The region has displayed an excellent performance for a long time, and several investors made significant profits specialising in property around the M25.

The foreseeable future appears promising for the capital in the eyes of most. There is an enormous demand, and not nearly enough supply – that is why the city is a fair market favourite for those investing in property. However, experts claim that London’s property market is extremely overvalued. According to UBS, a renowned global financial services company, London is the most overrated city in the entire world as of 2015.

Although it may sound scary, the claim does make sense. If it’s true, London might indeed be approaching a correction, and huge losses might be looming for investors.

When Will The Bubble Burst, If There Is One?

Of course, no one so far could provide hard evidence that a change is approaching. The UK Housing Observatory of Lancaster University, for instance, claims the M25’s property market is not in a bubble at the moment at all.

Once again, it appears the increasing property demand in London will bring only good times to the capital’s investors – but since some have been warning that it’s a good idea to diversify, it may be best to start looking into other options.

Great Alternatives To The Capital And The Southeast

Those who wish to follow this advice and spread their investment further than Britain’s southeast corner might be wondering what other good locations to invest in are. There are various options for established and would-be investors – a lot more than there used to be, say, in the last decade. Currently, the North seems to be the best choice.

Liverpool

The city of Liverpool has been rising for a while now, and its future looks bright. Significant developments are approaching, and the considerable amounts invested in many key areas have been making the city grow as a whole.

A large number of multinational companies are currently housed in Liverpool, and its urban population of over 1.3 million seems like it’ll only grow over time.

Leeds

Commonly regarded as the second largest financial district in the UK, Leeds has been attracting attention from investors. Many young professionals have been settling there, and the city’s growing population suggests it’s a good place to invest.

 

Manchester

As with London, there’s an extraordinarily high demand in Manchester, with yields averaging at close to eight per cent. Greater Manchester has been a focus point for investors for a few years now.

Newcastle

Another popular area for property investors, there are many business opportunities in this area, and the popularity of Newcastle University only helps to increase the demand.

Conclusion

London’s property market is still healthy for now, but since the future is unclear, it might be a good idea to invest in other suitable locations. Of course, there’s an important question investors should ask themselves for now – if there is a bubble in London, and if it bursts, will other cities follow it?

Author Bio
Hopwood House are property investment experts, with a wide range of property investments throughout all major towns and cities in the UK.

About the author  ⁄ Mike

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