A property crash – worth taking a gamble on?
Changes in house prices could be considered a national obsession in the UK and recent speculation about a property crash or a crash in the buy-to-let sector of the market has been no exception. Many commentators differ about the possible direction of house prices with average annual increases of around 10% continuing. So will the sector crash? Or won’t it? The articles below consider some of the issues on the supply side and the demand side of the market.
Head to Head: Will property prices crash? BBC News Online (13/03/07)
Five million new homes needed Guardian (16/03/07)
Past report of buy-to-let’s death have been exaggerated Guardian(21/02/07)
Britain likely to need 5m new homes by 2027 Guardian (17/03/07)
Questions
| 1. | Describe the main factors determining the level of supply and demand in the housing market in the UK. |
| 2. | Using supply and demand diagrams as appropriate, illustrate recent changes in the UK housing market. Draw a further set of diagrams to illustrate the changes in the rented sector of the housing market. |
| 3. | Assess the most likely direction of house prices in the next three years and give reasons for your answer. |