[Impacts of credit crunch on small and medium sized enterprises (SME) in the housing development industry.]

by

Acknowledgement

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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Abstract

The collapse of the US sub-prime mortgage market in mid-2007 caused widespread contamination in world financial markets, with effects felt across a wide range of banks and investors with exposure to what proved to be highly opaque and risky securities debt. In the UK, the aftershocks of the sub-prime mortgage crisis have hit financial sector activity, so far particularly in structured credit and leveraged buy-out activity. The equity markets have weakened and the general outlook for the financial services sector has deteriorated rapidly. Whilst there have been job cuts in banking and finance, the losses as yet have been fairly limited. The full impact of the credit crunch on property markets will be felt through the inter-related effects that it is having on investment, development and occupational demand. The effects in the property investment market were among the first to appear and have alreadyresulted in sharp changes in investment activity and pricing. The impact on development will become more apparent going forward in the amount of new construction activity. Impacts on occupational demand will be a consequence of the effect that the credit crunch, alongside other economic influences, has on real economic variables including business investment, employment, consumer spending and retail sales. These in turn will feed through to occupational demand for commercial property, interacting with property supply to determine rental levels. The demand/supply balance in the market and resulting rental trends will in turn feedback to pricing and decisions in both the development and investment markets.

Contents

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Background of the study1

Problem Statement2

Research Aims and Objectives3

Hypothesis/Research Question4

CHAPTER 2: LITERATURE REVIEW5

Introduction5

Pre-Crunch Market Drivers5

The Credit Crunch8

The Credit Crunch and Property10

The Credit Crunch and Property Investment11

The Credit Crunch And Property Development12

Office Current Office Market Conditions13

The Credit Crunch And Occupational Demand14

Investment Transaction Levels18

An Introduction to Yields19

Recent Trends In Yields20

Sources Of Investment21

CHAPTER 3: METHODOLOGY22

Action Research22

Historical Development23

Characteristics24

Reflection24

Iterancy24

Collaboration25

Role of the Researcher26

A Case for and Against Action Research27

Reliability and Validity29

Generalizability30

Ethical Considerations31

Making Judgment on Action Research32

CHAPTER 4: DISCUSSION AND ANALYSIS34

Implications for the Residential Market the House Builder's Business Model34

Future Supply36

Macroeconomic Environment36

Investment Outlook37

Retail38

Rental Growth39

Consumer Expenditure39

Land Values41

Affordable Housing42

CHAPTER 5: CONCLUSION43

REFERENCES45

Chapter 1: Introduction

Background of the study

Small and medium sized enterprises, or SMEs, are widely recognised as being the major contributors to economic growth, job creation and economic activity in most developed nation countries. As such, encouraging the growth and success of SMEs is vital to the success of these countries and their industries. However, in the aftermath of the “credit crunch”, which swept the world in the wake of the ...