— This is the script of CNBC's news report for China's CCTV on August 18, Monday.
Welcome to the CNBC Business Daily, I'm Qian Chen.
The UK's booming housing market has the Bank of England worried.
But a recent report by the The Royal Institution of Chartered Surveyors' showed that the momentum behind London's property boom appears to be fading.
But is that the reality on the ground?
CNBC's Catherine Boyle finds out.
The property market has long been the hottest thing about London. A city better known for its cold weather and grey skies.
The British capital buzzes with talk of how high prices can go and the seemingly unassailable rise that is seeing double digit growth in some London boroughs this year. Yet neither are worrying signs of cooling. Behind the headline grabbing deals with foreign buyers paying record amounts for Mayfair and Knightsbridge prime property, there is increasing talk of an affordability crisis in London. House prices are now more than 5 times the average salary for the first time since the credit crunch and those left behind are being dubbed Generation Rent.
Our challenge was to find a home for half a million dollars in London and most estate agents we mentioned that to pretty much laughed us out of the rim. This is what we came up with - a 1 bedroom, 1 bathroom, 400 sq foot apartment in Camden. It's built by a company called Pocket, specifically affordable, to try and help people on a middle income get that first step on the housing ladder in London.
[Paul Harbard / Pocket] "November of last year, Savills, the large firm estate agents did a survey in London and they reckon that there's a shortage of about 20,000 properties every year that is simply not being built. Now, Pocket is not huge. It's not going to add immensely to that but we will do something like 500 properties a year within a couple of years and that's starting to meet the need of those people who are the squeezed middle."
And there are now more people trying to sell you homes in London than ever before. The most popular new job in the country last year was an estate agent.
It's not surprising. Mark Carney, the governor of the Bank of England, has called the housing market the greatest risk to the domestic economy. But with the general election looming and the property market a key battle ground for middle class votes, the question is whether policy makers on both sides will be able to take the tough decisions necessary to solve the affordability crisis
I'm Qian Chen, reporting from CNBC's Asian headquarters.
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