The UK Housing Market Research Project
The UK Housing Market
The housing market is like any other market - it consists of buyers and sellers who come together to agree a price for a transaction. In some respects that is where the similarity ends. Houses come in all shapes and sizes and represent the biggest single purchase most people will make in their lifetime.
It is also the place where we live and raise families and also has to be somewhere convenient for work, school, and college and so on. As a result it is something to which we have a considerable emotional and physical attachment. This can mean that the normal factors that influence supply and demand take on different degrees of significance. For example, houses are not very mobile things and so the supply of them tends to be affected in a different way than some other types of product.
Demand for housing
Demand is the want or desire to possess a good or service with the necessary goods, services, or financial instruments necessary to make a legal transaction for those goods or services.
Growth of real incomes - privately owned housing is a normal good for most people. As average living standards rise, the total demand for housing expands, as does the demand for more expensive properties as people look to move "up market”.
Consumer confidence - confidence is vital in the housing sector. If expectations for the future performance of the economy deteriorate and people become less optimistic about their own financial circumstances, they are tempted to curtail their search for new home or delay entry into the owner occupied sector.
Equally when the economy is enjoying sustained growth and rising prosperity - improved confidence raises the number of home buyers and shifts the balance of power in the market towards the seller if properties are in short supply.
Jobs - because financing a...