Housing market

Question 1

What is the housing market

Answer 1

• The most significant sector of the housing market is owner occupied housing
• Alternative sources of demand for housing stock:
  > But to let
  > Second home
• Substitute to owner occupied housing:
  > Commercial renting
  > Social housing

Question 2

House prices

Answer 2

Supply and demand applies in the housing market although there are some interesting quirks
Unusual features of the housing market
- For most people their house is their most valuable asset, therefore house price play a key role in the economy confidence
> As a source of confidence in the economy
> To secure loans: people can borrow against the vale of their house, this may result in higher spending
- Falling hose prices will reduce the supply of housing, as home owners will become unwilling to sell