BOE Must Stay Vigilant on Housing Market: Forrester

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Sept. 26 (Bloomberg) -- John Forrester, CEO at DTZ EMEA, talks with Guy Johnson about the U.K. housing market as London properties experience a boom in prices. He speaks on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

The elevated levels we were in 2007, but you have to kind of look at what happened historically in the u.k.. we have some proclivity sending house house prices higher.

Should we be nervous?

The context is always important here.

You talk about the u.k. and the introduction.

I don't think anybody would believe there was a bubble in the u.k.'s house prices.

London, it has been five years since lehman's. london as performed outstandingly well.

Paris has outperformed france.

Amsterdam has outperformed the rest of holland.

Talent that the big market where is you have global players driving their businesses forward and are not acting in a recessionary way.

When you look at the commercial market, your area of specialism.

Is there the same vibe?

Headlines and dinner parties to discuss.

No, there isn't the same vibe at all.

Although i do think certain drivers are quite similar.

Rents in london are largely exactly the same way they were in 2007 when the bubble bust then.

Which were the same as they were in the late 1990's when that bubble burst.

In real terms, you took it into account.

In the cost of rent, real estate rent to an organization like google is substantially lower than it has been.

London becomes extremely cost effective as a physical place in which to put your talent and the buildings that we talk about at king's cross and elsewhere are largely trying to be the most competitive environments in which to organize talent and put them into the commercial world.

Is tech the new lead banking sector?

There is always a lead sector and no doubt while banking has been extremely quiet, benign at best in the last five years, slowly the technology media, digital in particular has overtaken.

This has been at the same time that london has become a true global leader in those morkt markets and companies are centralizing that talent.

I keep using the word talent on purpose because ultimately london's competitive advantage over every market in the world possibly barring new york is the availability of talent.

That is why government and policy issues are so important to maintain that advantage.

How much space there available for development?

Well, london is an available market.

You can double the size of the city.

Not just because you can go higher.

There are restrictions on that but actually there are significant tracks available to the north and east in the city of london.

Broad gate can continue to move.

Unlike the housing market where people talk about the problems of supply.

That doesn't happen in commercial -- you have parks and gardens.

You can't build into them.

If you want to be there, you pay the rate because of a lack of supply.

That's why the rates are higher than anywhere in europe square foot-wise.

4 million square feet of offices are being bill built where they have not been before.

There is an inertia that keeps on the whole republicans relatively low.

They don't spike.

How is the bulk?

Very different than last commercial -- very little depth available to build buildings anymore.

It was removed from the real estate markets in 2007 and 2008. companies are very well financed.

The real change of course is the globalization in london.

If you look at the cranes.

Look at the cranes and think who is actually financing the crane.

That can come from malaysia, qatar, saudi arabia.

Everywhere.

You can't say it is this.

I lived through japanese entry to london and the swedish one.

The difference this time is it is everywhere.

You also have london is an credible place.

You get a flight to quality.

Whenever there is a trouble spot in the world, we sold quite a lot real estate to greek investors.

We're selling to syria at the moment.

My organization and competitors are seeing the same traits.

Currency is efficient and also london is seen as the real estate global market of hedge where you can be sure you'll get your money back.

These are not investors for growth.

These are investors for capital retention.

We'll leave it there.

Interesting conversation.

John forester.

Let's stay with the property scene for another minute because it is time for today's pulse number.

55 euros.

A meager price tag for a piece of history.

That's how much it cost to spend the night in chancellor merkel's old east berlin apartment.

This text has been automatically generated. It may not be 100% accurate.

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