StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Recent Developments in the UK Housing Market - Essay Example

Cite this document
Summary
This research is governed by the following research questions, which will aid in attaining objectives and aim of the research: Why is there a waiting list for affordable housing in the UK? What policies could the government undertake to improve the situation?…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91.6% of users find it useful
Recent Developments in the UK Housing Market
Read Text Preview

Extract of sample "Recent Developments in the UK Housing Market"

Business Environment- Recent Developments in the UK Housing Market Question 6: Why is there a waiting list for affordable housing in the UK? What policies could the government undertake to improve the situation? There are more than two million people in the United Kingdom who struggle to pay their mortgages and rent. This in turn affects the chances of payment. Many home owners are having their houses recuperated; this is because the home owners are not able to keep up and pay their mortgages reimbursements. Another reason for the common waiting list is the fact that families on low incomes and are renting homes have to live in poor living states and no security. The government should renovate existing houses because the households earning low incomes are entirely relying on private rented sectors that are not regulated. These areas are characterised by poor living conditions and security. It is important for the government to develop more housing because there are more than 1.7 million families on local authority housing waiting lists. This is a significantly huge number. The government should ensure that the new houses are environmental friendly and affordable to everyone needing them (Barker, 2008). Question 7: What reasons might account for the falling numbers of first time buyers in the UK property market over the last decade? What effects might a falling number of first time buyers have on the overall UK property market? The first time buyers in the UK property market are important because they act as liquidity source to the whole housing market. These first time buyers generally bridge the gap thus enhancing transactions as regards the housing property. The rates of transactions that proceed in the housing market may stall if the first time buyers are unavailable. Between 1998 and 2007, house prices increased steadily in the United Kingdom, making the ownership for the first buyers to be unaffordable. Interest rates for the first time buyers affected them to a comparatively wide margin (Barker, 2008). This is because the group may not have built up a previous equity and many of them may be earning low incomes than other people. When the first time buyers think of house affordability, they first consider the real interest rates given. On the other hand, the first time buyers may face more severe affordability burdens when prices of houses quickly upsurge. Lastly, it is imperative to note that structural shifts in mortgage or credit availability are other factors that led to fall of first time buyers purchasing homes. Question 8: Explain how the policies announced by the Coalition government might help to improve affordability? In 2010, the government introduced a mortgage rescue scheme that protected the low income households from being recuperated. The mortgage scheme consisted of two parts including the equity loan which was an interest loan issued by various housing associations. The interest rates could pay off between 25% and 75% of the mortgage rates thereby reducing monthly costs. On the other hand, an interest rate of 1.75% was implemented on the loan (Barker, 2008). Clearance of the loan payments would be done when the house was being sold or when circumstances were enhanced. The government devised a mortgage to rent program that allowed various households to stay in their houses even though they could not manage to be the owners of the house (Jones, White and Dunse, 2012). This is because the households either had debts accumulated on their house or they had faced unemployment for a longer duration. The housing association purchases the house and lets the former owners to stay in the house as tenants. This policy was considered to substitute the self to rent schemes of private owners that charged high rents on their tenants and offered short term contracts (Barker, 2008). Question 9: What other policies could the Government implement in order to reduce the volatility in house prices? Improving house affordability among the people and dropping housing volatility have been on-going issues for the United Kingdom governments. Some major policy initiatives were: new build indemnity scheme whereby home builders federation provided 95% mortgages for the fresh builds by the government warranting the loan issued. The first buy policy initiative is a 20% equity loan issued by the house builders and the government to assist fund deposits (Smith and Searle, 2010). In addition, another policy to be implemented is the growing places fund. The government offers €500 million for infrastructure projects done locally and are unblocking new housing expansions. The Britain building investment fund of €400 million, in supporting the small and medium sized house building companies needing development finances is also another measure (Stephens, 2011). Another policy is the ‘build now pay later policy’ which will allow home builders to start building projects with no costs of land payment. Introducing land auction and new homes bonus policies would help in reducing volatility in house prices. In addition, community infrastructure policy may be important because it will enable local authorities to need developers in contributing to the infrastructure costs (Stephens, 2011). Question 10: On the basis of all the evidence presented in the case study and otherwise, do you think UK house prices are likely to increase, fall or stay the same over the next five years? Explain your answer. According to Goodhart and Hofmann (2008), the United Kingdom house prices are likely to fall because the government had announced its intention in speeding up and simplifying the United Kingdom planning system. This was to reduce the delays and perils in attaining planning approvals. On the other hand, giving the people more say on the location and kinds of new properties and more reimbursements of the progress of their people will assist in lowering the house prices (Goodhart and Hofmann, 2008). In addition, the government is allowing for reforms in the banking sector with an aim of reducing its potential to destabilising the entire economy, as well as the housing market. When the government completes the building of more houses, it will be able to keep up the pace with the needs of the population (Smith and Searle, 2010). This means that in future, the housing needs will have been met for every person at relatively low prices. References Barker, K., 2008, Planning policy planning practise and housing supply, Oxford Review of Economic Policy, Volume 24, Number 1, pp. 34-49. Goodhart, C., and Hofmann, B., 2008, House prices, money, credit and the macro-economy, Oxford Review of Economic Policy, Volume 24, Number 1, pp. 180-205. Jones, C., White, M., and Dunse, N., 2012, Challenges of the Housing Economy, New Jersey: John Wiley & Sons. Smith, S. J., and Searle, B. A., 2010, The Blackwell Companion to the Economics of Housing, New Jersey: John Wiley & Sons. Stephens, M., 2011, Tackling housing market volatility in UK, JRF Housing Market Taskforce, available at http://www.jrf.org.uk/sites/files/jrf/housing-markets-volatility-full.pdf. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Recent Developments in the UK Housing Market Essay - 1”, n.d.)
Recent Developments in the UK Housing Market Essay - 1. Retrieved from https://studentshare.org/business/1608935-businesss-environment
(Recent Developments in the UK Housing Market Essay - 1)
Recent Developments in the UK Housing Market Essay - 1. https://studentshare.org/business/1608935-businesss-environment.
“Recent Developments in the UK Housing Market Essay - 1”, n.d. https://studentshare.org/business/1608935-businesss-environment.
  • Cited: 0 times

CHECK THESE SAMPLES OF Recent Developments in the UK Housing Market

Strategic Analysis of Hackney Homes

Reports show lack of liquidity in the commercial property market mainly due to the pricing uncertainty.... Introduction Hackney Homes is one of the most famous organizations in uk which manages the council homes there.... The credit crunch made it difficult for the landlords to make developments on the building and work on nonperforming assets rapidly unlike the early 1990s....
11 Pages (2750 words) Essay

Businesss environment

Instructor: Business Environment- Recent Developments in the UK Housing Market Question 6: Why is there a waiting list for affordable housing in the UK?... Business Environment- Recent Developments in the UK Housing Market Question 6: Why is there a waiting list for affordable housing in the UK?... Question 7: What reasons might account for the falling numbers of first time buyers in the uk property market over the last decade?... The first time buyers in the uk property market are important because they act as liquidity source to the whole housing market....
3 Pages (750 words) Essay

The Housing Market in the UK

There are truly so many different issues that must be taken into consideration in regards to the uk housing market; however, one of the most important, and thus one which should indefinitely come first, is that of the matter of the shortfall of the housing supply in the UK, and one of the main explanations for this has to deal with the matter of the high immigration rates into the UK; in more basic terms, there are constantly new and more people that are moving to the UK, and the supply is falling short of the demand, which thus overall is causing quite a catastrophe of sorts....
6 Pages (1500 words) Essay

Resolving Urban Housing Problems in the United Kingdom

The paper "Resolving Urban Housing Problems in the United Kingdom" states that the current economic downturn, rising land prices, falling profit margins and government inflation control policies all have contributed in large measure to the current housing problems in the uk.... hellip; The subprime mortgage crisis has been responsible for most of these problems though a number of other variables also have impacted the supply side of housing the urban centers in the uk such as the above-mentioned supply constraints and the influx of immigrants from Eastern Europe (Norwood, 2009....
5 Pages (1250 words) Essay

Economic Performance of the UK

% suggesting the fact that all is not well for the uk economy.... MF, during 2007, revised its economic forecasts for the uk economy due to its improved performance and termed it "impressive" as during last five years i.... The recent developments, especially in the later half of the year 2008 however suggest that all is not well with UK's economy as it is experiencing serious challenges ahead due to the spread of subprime mortgage crises originating from US....
6 Pages (1500 words) Coursework

Assess the impact of re-introducing rent control on the market for housing

The United Kingdom's housing private has multiple divisions with houses and apartments owned by the private sector and the local authorities; additionally, with developments in the market, housing associations have also become prevalent.... However, the are other influences of rent control different from the common observation and conception that elimination of the controls is more efficient as it could provide a more desirable housing market for potential investors....
5 Pages (1250 words) Essay

Britains Recent Credit Crisis

Northern Rock was one of the main mortgage lenders in the uk who had jumped onto the home loan bandwagon headfirst and declared unprecedented growth in their operations.... he circular flow diagram can be used to explain the credit crisis in the uk by showing how consumer spending affects the other factors of the economy.... hellip; The writer drew parallels between the US and UK economy, in their ever-increasing dependence on business and financial services for overall growth, the higher rate of consumer spending, the higher percentage of unsecured loans given away by the banks, the over-valuation of real-estate and topping of housing prices....
6 Pages (1500 words) Case Study

Economic Report: The Scottish Housing Market

nbsp; The final part of the project explains the distinguishing factors influencing the housing market outcomes in Scotland and that in the uk.... Growth management was also practiced in the uk which has been effective in influencing the direction of the industrial sector and for anticipating areas of opportunities and development.... This report will first provide an analysis of the economic framework of the Scottish housing market over the last 10 years....
12 Pages (3000 words) Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us