housing

house-prices

History of UK Housing

A look at the major trends in UK housing in the past century, including the trends on housing tenure, house prices and the supply of new houses. Victorian housing The Industrial Revolution saw rapid growth in inner cities as people flocked to the city for new factory jobs. This accommodation was often hurriedly built by private enterprise and was often squalid, with large factory populations squeezed into small areas, leading to the classical slums of ‘Dickensian’ Britain.

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Factors affecting supply and demand of housing

A look at factors affecting the demand and supply of housing. In summary, some of the main factors include:1. Affordability. Rising incomes mean that people are able to afford to spend more on housing. During periods of economic growth, demand for houses tends to rise. Also, demand for housing tends to be a luxury good. So a rise in income causes a bigger % rise in demand.This graph shows…

Factors that affect the housing market

Factors that affect the housing market

The housing market is influenced by the state of the economy, interest rates, real income and changes in the size of the population. As well as these demand-side factors, house prices will be determined by available supply. With periods of rising demand and limited supply, we will see rising house prices, rising rents and increased risk of homelessness. Factors determining house pricesMain factors that affect the housing marketEconomic growth. Demand for housing is dependent upon income. With higher economic growth…

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UK House Price to income ratio and affordability

An examination of UK house price affordability.This shows that for first-time buyers the average house price is over five times average earnings. This is much higher than previous historical trends. There is also a regional disparity. WIth the ratio of house price to earnings over 10 times in London. In many parts of the country, potential buyers are being kept out of the market due to house prices being much higher than average incomes. For young people especially, owning a home has…

UK Housing Market

UK Housing Market

A look at the main UK housing market data.House prices Affordability of housing Interest rates Supply of housingHouse price inflationNationwide dataAnnual house price inflation running at 5.3% in Q1 2016 London showed strongest housing market with prices rising more than other areas. Price of a typical home is £198,564 (Q1 2016)UK House prices in past few decadesIn 1969, average house prices were: £4,312 In 1975, average house prices were:…

How the housing market affects the economy

How the housing market affects the economy

A look at how the housing market and changes in house prices affect the rest of the economy. In summary:Rising house prices, generally encourage consumer spending and lead to higher economic growth. A sharp drop in house prices adversely affects consumer confidence, construction and leads to lower economic growth.Real house prices the UKChanges in real house prices. House price drops in 1990 and 2007 – both corresponded with an economic downturn. Wealth effect The wealth…

Housing market crash

Housing market crash

Despite housing being a secure asset, the housing market can be prone to bubbles and periods of rapidly falling prices. In recent years, the period 2005-09 saw a prolonged and significant fall in house prices in both the US and Europe.A housing market crash can be precipitated by a change in economic fundamentals (higher interest rates, lower growth) and/or a change in market sentiment (confidence turning to pessimism. What causes housing market crashes? Essentially a period of falling house prices occurs when…

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House prices and interest rates

Interest rates have a strong influence on house prices, principally because changes in the interest rate affect the cost of mortgage payments. How do interest rates affect house prices?If interest rates rise it will have a significant effect on increasing the cost of mortgages. Higher mortgage payments will deter prospective home-buyers – it becomes relatively cheaper to rent. Also, the high cost of mortgage payments may also force some existing home-buyers to sell. This increase in sellers and decline in buyers will cause house prices to fall. See also:…