The London housing market has been branded the second most overvalued in the world by Swiss bank UBS.

The bank said London was at risk due to the growing disparity between house prices and incomes in the city.

The UBS Global Real Estate Bubble Index said Vancouver in Canada was the only city with more of a housing bubble than London.

The report called all European cities overvalued with the exception of Milan though it stated buying an apartment was still possible with the exception of Paris and London.

UBS blamed low interest rates on contributing to overheating markets in London, Stockholm, Munich and Zurich.

The report said London property prices have achieved double digit growth every year since 2013, leading to a 50% rise in values.

Real prices now are 15% higher than at the 2007 market peak, while real incomes are 10% lower.

The report said: “High stamp duty rates for luxury properties and new stamp-duty rates for buy-to-let have failed to cool down the broader housing market.

“However, prices for the high end are stagnating, reflecting an end to the global boom for luxury properties. While buyers from overseas matter for the prime market, their overall impact on the housing market should not be overstated.

“The renewed GBP depreciation following the UK’s vote to leave the EU may be seen as an entry point into the London market for international buyers.

“But we expect economic uncertainty and the ample supply of high-end developments to deter a renewed luxury boom. “