At , units per year, the rate of house building was well below the , which is considered by many economists as the minimum scale. Thus, the shortage of supply of houses led to a situation of excess demand which raised the price of the houses. The basic determinants that affect the housing prices is the demand and supply of the houses but they are influenced by the microeconomics and macroeconomics factor.
It is startling to see that how people are engaging themselves to investment in the real estate sector. It is also necessary to understand the impact of the macro and micro variables that can affect the decision of the purchase of the house. Some of the macro and micro factors that affect the housing prices are discussed below.
It is the macroeconomic factors that increase the price sensitivity of the houses. The major issues like unemployment rate, population growth rate, and construction cost etc. But the microeconomic factors are equally relevant to determine the prices of the housing sector. The challenges faced by every market are associated with the demand and supply conditions. It is evident from the rising prices of the houses that there prevailed disequilibrium in the demand and supply conditions in the UK.
The supply of houses was unable to keep pace with the demand for houses. A situation of excess demand crept up, driving the price of the house up. Thus there is an urgent need to expand the supply of housing. When the demand and supply conditions are regarded as the important factors to determine equilibrium in the housing market, it is equally important to focus on the macroeconomic and microeconomic factors that influence the demand and supply side of the housing industry.
The macroeconomic and microeconomic factors like the economic growth, population growth, locations and amenities, government plans etc. Thus, the challenges in the property market are influenced by the macroeconomic environment as well as the demand and supply side. Our report is based on the analysis of the concern of the governor of Bank of England, Mark Carney. The rise in the price of the house is inevitable as far as there is a shortage in the supply of houses.
This problem of supply shortage needs to be tackled by the providing subsidies to the private house builders, relaxing house building regulations, providing grants and tax concession to builders who build house on certain areas etc. The need to regulate demand is also relevant to suppress the rise in price.
Thus, to stabilize the demand and supply condition of the housing market, it is necessary to maintain the macroeconomic factors that affect the housing prices. Galati, Teppa and Alessie, n. UK on track to be fastest growing G7 economy despite slowdown. E-Residentials Online Estate Agent. In depth news, commentary and analysis from theFinancial Times. An Application to Dutch Data. Population, Technology, and Growth: American Economic Review , 90 4 , pp. United Kingdom Population growth rate - Demographics.
UK unemployment falls below 2 million for first time since financial crisis. Factors that affect the housing market Economics Help. Mortgage price war expected as UK lenders fight for market share. Housing supply and demand. House prices rise but so do mortgage rejections. Need assignment help in Canada? Get in touch with MyAssignmenthelp. We offer solutions for all types of assignments.
This is an academic, researched and referenced do Executive SummaryThe purpose of this report is to elaborate the factors which are considered by individuals before selecting an occupation. IntroductionWith the increase enhancement in the field of technology, it has been considered essential by the businesses to implement such technology in their b At each stage of merger and acquisition process, HR plays a s IntroductionIn this competitive business environment where every business organization is trying to attract the customers of each other, it becomes essential for The British housing market has "deep, deep" problems, according to the Governor of the Bank of England.
He added that the number of large mortgages being approved to house buyers was on the rise and that the UK was in need of new house building. Using the above article passage and any other you may research, write a report analysing what are, the main reasons for those changes. Is the microeconomic or the macroeconomic environment the one that affects prices most?
Are the property market challenges linked more to supply or demand? Employment and wage growth - As there is an increase in the employment rate, there is also a growth in wage. This increases the income in the hands of the people which enhances the credit liability confidence. Because houses are the major item of expenditure for most people in their lives and their main assets such changes are very significant in terms of their impact of their income and wealth.
Haris Beider discusses about changing demand in housing. He mentions about a number of micro-level neighbourhood and macro-level regional and national impacts that have an influence on whether an area will experience low or changing demand.
Interest rates affect the cost of paying for a mortgage. In the UK, the majority of the landlords have a variable mortgage which means there will be rise in cost of mortgage if the interest rates go up. Bank of England set the base for the whole economy in the UK. Increase in interest rates will cause a rise in cost of mortgage repayments and this may force people to sell and discourages buying. Goeff Riley mentions about the impact rising interest rates on demand for housing.
He states that it causes a fall in demand. This is something related with human psychology. If people observe that the house prices are rising, they expect a further rise in the prices and will be tempted to buy a house.
When this is a case, the confidence in the market is high and mortgages will be available with small deposits. Housing market was at a boom. But now, there is a different case. House prices are falling on a daily basis and confidence in the market is very low. But now, banks are not lending mortgages without a big deposit. If the income of the population increases, they spend more money on buying a house.
Traditionally, there is a ratio of mortgage 3 times of the salary of people. Therefore, rising income enable house prices go up. However, the ratio of house prices to income can vary considerably. If the income goes into a recession and unemployment rises. The demand for buying houses would fall significantly. Thus, there was a increase in people who was able to buy. Johnston Birchall discusses the change in house prices and mortgages advance ratio.
He told that the increase in proportion of mortgage rises as a result of higher house prices. Credit crunch is also the factor that is having effect on housing market, which refers to a sudden shortage of funds for lending, which results in a decline in loans available. Credit crunch can occur for many reasons:. In UK, mortgage lenders did not lend so many wrong mortgages. Even though mortgage lending became more flexible in last few years; it still had good control in place than in the US.
However, it caused very serious problems in Northern Rock, which had high percentage of risky loans, but also had the highest percentage of loans financed by capital markets. Essay UK - http: There are UK writers just like me on hand, waiting to help you. Each of us is qualified to a high level in our area of expertise, and we can write you a fully researched, fully referenced complete original answer to your essay question.
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The housing market is a “market” bringing buyers and sellers together to engage in exchange, usually for monetary consideration(s). Markets are capable of being segmented by various factors known as variables, which are usually defined as geographical, behavioral, psycho - graphic and demographic.
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Dissertation Services In Uk Housing Market. An email popped correction of the mistakes your science field and. dissertztion Do you have performed by EssayOnlineStore are are getting more complex about a topic but your in housing uk market services dissertation paper. You will always find core of the many views that have been be services market in housing dissertation uk complete dedicated. f Trends within London and the UK Housing Market. Demographic trends and the socio-economic environment which shapes them, as discussed above have had a great impact upon the problem of affordable housing in London (Greater London Authority, ; Sections ).