‘Bubble-like’ signs in London market

London’s housing market is beginning to show “bubble-like conditions” as overseas investors bid up prices and buyers take on more debt to purchase properties, according to a report by the EY Item Club.

House owners are now borrowing as much relative to their income to purchase real estate in the UK capital as they were before the financial crisis, the London-based group sponsored by EY, formerly Ernst & Young, said.

The average London home will cost about £600,000 by 2018, it estimates. It’s around £404,000 now, according to the Land Registry.