London has the world’s most overvalued property market and it is at risk of a ‘substantial price correction’ according to a new report from Swiss banking giant UBS.The ‘Global real estate bubble index’, which tracked 15 global cities, found a skilled service worker in London would have to work for 14 years to afford a 60 square metre flat (650 square feet), second only to Hong Kong where it would take over 20 years. London’s residential property prices have soared by 40% since the beginning of 2013, more than offsetting the losses triggered by the financial crash. Prices in London are 6% above their previous peak in 2007, while prices in the rest of the country have fallen by 18%. While property prices have sharply increased, real-term earnings have fallen by 7%, taking price-to-earnings ratios to new heights. Claudio Saputelli, UBS head of global real estate, said: "A mix of optimistic expectations, favourable economic fundamentals and capital inflows from abroad has caused valuations to soar in certain cities in recent years. Loose monetary policy has prevented a normalization of housing markets and encouraged local bubble risks to grow." London’s property prices have attracted global investors looking for a safe haven for their wealth, while domestic demand has been fuelled by the help-to-buy scheme, attractive buy-to-let yields and population growth, according to UBS. Hong Kong was the only other city described as a ‘bubble risk’ in the report. Though it would take a worker a longer period to buy a property, average price-to-earnings ratios in the city have historically been higher.