LONDON’S house price boom is creating dangerous imbalances in the British economy, the European Commission warned yesterday.
More houses are needed to return the market to health, the study said, noting that soaring prices are driving up household mortgage debts and building financial risks.
“The relatively slow response of supply to increases in demand continues to drive house prices higher, particularly in London and the south east, and also leads to buyers taking on high mortgages,” it said, calling on action from the government to make building easier.
The warning came as the UK jumped further up a league table of the world’s fastest growing housing markets, according to figures out today by Knight Frank.
According to the property agency’s Global House Price Index, the UK jumped up the world rankings from 34th place to 12th, after prices grew by 9.1 per cent in the year to the end of March.
Tim Wallace, Kasmira Jefford