"The UBS Global Real Estate Bubble Index score for London declined for the second straight year but remains in the bubble-risk zone. Overall, inflation-adjusted prices are more than 10% higher than in 2007, when the last bubble burst, while rents have stayed roughly stable and real incomes have gone down by 10%.
... The relative weakness of the city’s housing market can be attributed to a few causes. First, housing remains unaffordable for London’s citizens ... Second, the prime segment is hurt by higher stamp duties for luxury and buy-to-let properties ... Third, inflation continues to erode the purchasing power of local residents."