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INSIDE TRACK: Paying the price of London's housing 'bubble'

I HAD been prepared for the patter and the hard sell.

No assertion of "wow factors" and "forever homes" was going to part me too easily from my money (or more accurately the bank's).

But the estate agent couldn't have been less interested. There was not so much as a twitch of his pimpled chin when we entered. A grunted "bye" accompanied our exit.

He wasn't Phil, let alone Kirsty.

But what came across as laziness and complacency turned out to be entirely well-placed confidence.

A few days later, the dinky terraced house with three tiny bedrooms (if you possess particularly small beds) on an undistinguished street a mile or so to the wrong side of Peckham, is already "under offer".

This is another sign that the rip-roaring London housing market boom has taken firm hold even of unfashionable parts of its unfancied southern boroughs.

The housing boom is the latest example of how London is operating in a different economic sphere to the rest of the country.

The price of the average residential property in the capital rose by £63,000 in the last year, reaching an average of £458,000. This is two and a half times the typical Scottish home. If you want a scrappy bit of land to call a garden, expect to pay a good bit more.

Yet elsewhere property prices are still barely moving. Even the Stockbroker Belt of the Home Counties has been left behind.

Behind the London boom are a profusion of domestic and foreign cash buyers, rapid population growth and planning restrictions.

We have had wealthy buy-to-let landlords sucking up housing supply.

They have been joined by the "buy-to-leave" investor, usually from overseas, parking his money in an empty property and allowing its capital value to appreciate. His cash might be going into central London properties.

But this has pushed those City types who are merely rich, not filthy rich, into the sorts of neighbourhoods, such as ours, located in the white gaps on Tube maps.

For those in good jobs, it is an inconvenience not a disaster. Moderately paid public sector workers and, um, journalists will cram their kids into small flats or accept long, pricey commutes from distant towns. Others who are less well off will continue to be vulnerable to the private rental market with its short term contracts and rising rents. Some will struggle to get even this.

Perhaps the boom will moderate as it spreads. Estate agency Savills using the sort of patronising terminology that so endears Londoners to others, says that "more London buyers will make the move out to the regions, and take advantage of the price gap".

Nevertheless, many observers are nervous. The Organisation for Economic Cooperation and Development has warned of overheating. Bank of England Deputy Governor Jon Cunliffe said it is "dangerous" to ignore its momentum.

The problem is that many solutions, especially a rise in Base Rates, could hurt the real economy across the UK.

And so it could be, again, that dealing with a bubble centred on London, could hurt those far outside the capital.

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Finance

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