If
we examine the prices of houses in London over the last ten years, it seems to
be the case that they are constantly going up. This is fantastic if you own one
because there is no doubt that London property is a solid investment for the
long and short term. Why is London so different from the rest of the UK? The
answer is the fundamental law of supply and demand. Over the last quarter of a
century, the population of the UK's capital has gone up by 20 per cent, and the
number of houses in the city has not increased by anywhere near that level.
More demand and less supply have the effect of a rise in prices.