housing
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. (falling house prices can contribute to economic recession)
Rising house prices can also redistribute wealth within an economy – increasing the wealth of homeowners (primarily older people), but reducing effective living standards for those who do not own a…
One measure announced in this years budget was government support for mortgages loans. A new Help to Buy scheme will allow people to obtain a 20% interest-free loan from the government, as long as they put down a 5% deposit and buy a newly-built property
However, some have suggested the fundamental problem in the UK housing market is the persistent shortage of housing – and increasing the availability of credit doesn’t directly address this problem. The number of households is forecast to grow by 232,000 a year until 2033, and…
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:…
In recent years, we have had a devastating global credit crunch, the longest and deepest recession since the 1930s (if not worse). Across Europe, we have seen mass unemployment and in countries like Spain, Ireland and Portugal, the housing market has seen up to 50% falls in house prices. Yet, despite this financial and economic upheaval, UK house prices have bucked the trend, avoided a major collapse and now exceeded pre-crash levels.
It is true that in the first years of the credit crunch, UK house prices did fall 20%….
In the past decade there has been a divergence between house prices in different parts of the UK. In particular, house prices in London and surrounding areas has rocketed to unprecedented levels.
Source: ONS
According to the ONS, average mix-adjusted house prices in September 2015 stood at £299,000 in England, £175,000 in Wales, £199,000 in Scotland and £162,000 in Northern Ireland.
Most expensive region
The most expensive region is unexpectedly London – with…
Readers Question: I was looking for info on housing demand/supply. One area you have no info on is rental trends. There is a lot written about a critical housing shortage in the UK, starting with the Kate Barker review (2004), who took great pains to assure anyone who asked that UK house prices could only go up because of supply/demand fundamentals. None of her projections have been achieved and, if her assumptions were right, there should be an acute housing shortage, evidenced by rising rocketing rental rates, and…
The London housing market is one of the most expensive places in the world. In Sept, 2015, the average London house price is now just under £500,000 (BBC)
Since 2013, house prices in London have risen 40%, defying a weak economy and stagnant growth in average earnings.
London house prices are 7% higher than the pre crisis peak of 2007 and have consistently outpaced growth in the rest of the UK. Source: ONS House Price Index | via…
The government have announced a change in stamp duty. The chancellor George Osborne claims the change to stamp duty will cut the rate of tax for 98% of house purchases.
New marginal tax rates are:0% tax on house purchases up to the value of £125,000
2% tax on purchases between £125,000 and £250,000
5% tax on purchases from £250,000 up to £925,000
10% tax on purchases from £925,000 to £1.5m
12% tax on purchases over £1.5mThe tax change will cost the public purse £800m and represent a £4,500 cut in tax on average home…
