![]() According to this line of research the high real cost of construction and strict regulations on new developments introduce unpriced supply restrictions. Consensus literature shares in common that in densely populated urban areas the rigidity of the supply side plays a major role in housing market cycles. However theoretical works support the view that housing market cycles in large metropolitan areas feature asymmetric behaviour. In the literature, dedicated empirical studies of the dynamics of housing markets in global cities are still rare. The positive agglomeration effects in the productive sphere and the global city status that London enjoys, have taken their toll in the cost of housing. In this respect, the city of London was ranked at the top of the Global Power City Index (GPCI) in 2019 and it was in the same position for the last few years in a row. Footnote 1 Moreover, the city also constitutes an important innovation hub, it hosts high quality educational institutions and features high degree cultural diversity. In this respect, the city of London was consistently ranked at the Global Financial Centres Index (GFCI) in the last ten years. After the 1980s the supremacy of the city as global financial centre has been unchallenged. The globalization process was enhanced in the 1980s by the deregulation of the financial market promoted by the Prime Minister Margaret Thatcher which re-consolidated London as a world class financial centre. ![]() London’s influence today draws on the city’s long-standing status as a centre of international power, first as a trading centre then as an imperial capital. The city of London has long been considered a global metropolis (see for example Sassen 2003). These cities are “global hubs” which are instrumental in supporting the operation of the global financial and trade systems. The literature on urban studies supports the view that the process of internationalization in financial and service sectors has created “global cities” or world cities (see, for example, Sassen 1991 Dehesh and Pugh 2000). During the last few decades economic systems have been characterized by a high degree of globalization.
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