London prices set to soar

The Royal Institute of Chartered Surveyors (RICS) has predicted that house prices in London will soar by 40% over the next five years, renewing fears that government policies are stoking a property bubble. The RICS said prices in the capital would jump by an average of nearly 8% a year over the next five years – nearly double the 4.2% expected for England and Wales. Simon Rubinsohn, chief economist at RICS, commented: “There is no doubt that with the current dynamic in London, and if prices rose 40% over five years, a property bubble would be a risk, although I would be more worried if prices were out of line with supply and demand.”