The UK Housing Market

Question 1

What are the determinants of demand in the housing market?

Answer 1

• Increased population (immigration, birth rates, Mortality rate)
• Changes in attitudes (younger people may think of investing)
• Higher incomes
• Higher minimum wage
• Easier to borrow/access to finance
• Expectations
• Investment returns
• Stamp duty (tax on a property over a certain price)
• Divorce and separation

Question 2

Give two effects of housing shortages.

Answer 2

• Less disposable income
• Homelessness
• Children out of education due to relocation

Question 3

Define negative equity.

Answer 3

Paying for something that is priced more than its worth.

Question 4

What are some solutions to housing shortages?

Answer 4

• Giving subsidies to builders
• Council estates/build more properties
• Re-zone land (Approving land to build housing estates)
• Easy planning permission
• Restrict immigration