It's an economy built on fragile foundations
The London property market is propped up
By foreign millionaires
The rest of the UK is struggling
The bubble will burst again soon
I'd respectfully disagree with the bolded bit. Foreign money isn't buying Tower Hamlets. It has already bought Mayfair which is why it is a residential ghost town but other parts are not foreign per se and have just gone bid crazy. Two bed ex council flats in Earl's Court are now just under a million quid.
There's just no space left.
Canary Wharf - commercial rents are going to start edging higher than Mayfair soon. I am seeing lower end office space go from £22/sq ft to £27/sq ft in less than a year even though the property has remained vacant for the entire time. That is crazy, esp as with SC rates an off prime office space is now nearly £60/sq ft.
I do agree that it will all have to come off, but that won't happen until Carney hikes up interest rates. I think higher interest rates to reward savers plus harder lending terms will be better for the country in the long run.