The capital’s housing has become the most expensive in the world in recent years, driven up by investors moving funds out of assets in the eurozone to what they regarded as a safe haven.
Over 60 per cent of central London property acquisitions from 2007 to 2011 were bought by foriegn money, according to Fathom Consulting for Development Securities.
The fall would come after an initial further surge in the London property market, as money leaves the eurozone in the wake of the break up.
However, as these assets are being bought as an insurance against the break up of the euro, once that had happened insurance against it would no longer be required.
“In our judgment, a collapse of the single currency area could ultimately produce a 50pc fall in the value of PCL property,” said the report.
The London housing crisis has seen property prices surge in recent years, with private rents soaring over 30 per cent in the last year in certain areas of London.
An average one bedroom flat in Islington now costs over £330 per week to rent.
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