London Housing Market Shows Rising Bubble Risk as Asians Buy

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 today by the EY Item Club.

Homeowners are now borrowing as much relative to their income to purchase real estate in the U.K. 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 pounds ($980,000) by 2018, it estimates. It’s around 404,000 pounds now, according to the Land Registry.