A new report states that house prices in London are rising by £5 every hour, roughly $7.50.
According to CNBC, property consultants at Surrenden Invest studied the statistics released by the U.K.'s Land Registry last October, leading to this staggering conclusion. The alarming data have caused analysts to question whether an asset bubble is forming.
"London is such a demand-driven market that it operates almost entirely independently of anywhere else in the U.K. There's a lack of physical space for new build properties and those that are being built cannot keep up with the rate at which they are being demanded," Surrenden Invest's managing director Jonathan Stephens said.
Furthermore, U.K.'s growing population makes the situation more permanent as it seems. The Office for National Statistics (ONS) stated that the country's population is expected to increase by 4.4 million in a 10-year span. Many of these people are expected to migrate to London in search of work opportunities.
Another research done by CBRE, an international commercial real estate firm, confirms this study. According to City A.M., the CBRE Regional Development Land has forecasted that London house prices will rise by 31 percent between this year until 2019.
The research suggested the passing of the Housing and Planning Bill to help boost U.K.'s real estate market.
Jennet Siebrits, CBRE's head of residential research, stated, "Developers will soon be able to deliver schemes that are 100 per cent for private sale, supplying affordable starter homes rather than incorporating an affordable rental element."
The bill is currently in the Parliament, awaiting for its approval.
"These reforms are a positive move and show the government is taking action to address the UK's chronic undersupply of housing in the private sale sector," Siebrits added. "However, more action needs to be taken to address other types of tenure, and ensure long term availability of affordable homes for sale or to rent."
