UK ECONOMY

The Economic impact of UK government monetary policy on the supply of affordable Housing

Abstract

In recent years, the UK economy has been through turmoil, firstly with the credit crunch by the banks, mortgage lending to purchase properties and the advent of the recession, has impacted significant challenge on the government to increase, stimulate and finance to housing supply against the backdrop of spending cut which is on the verge of creating an imbalance to meet government housing supply targets. In this study we try to explore the concept of supply of affordable housing in a holistic context. The main focus of the research is on the economic impact and its relation with UK government monetary policy on the supply of affordable housing. The research also analyzes many aspects of supply of affordable housing and tries to gauge its effect on UK government monetary policy. The government impact assessment to meet targets of affordable housing possesses a threat to economic growth, poverty, displacement, deprivation, unemployment and wealth inequalities. Finally the research describes various factors which are responsible for supply of affordable housing and tries to describe the overall effect of UK government monetary policy on the supply of affordable Housing.

Table of Contents

Abstract2

Introduction4

Relation to previous research5

Proposed methods6

Reflections8

Conclusion10

Timetable11

References13

The Economic impact of the UK government monetary policy on the supply of affordable Housing

Introduction

The overall aim of this dissertation is to further knowledge of understanding of the economic impact of the UK government monetary policy on the supply of affordable housing. However, in order to gain an understanding of the forces that impact on the supply of affordable housing a broad research on monetary policy concept and the transitional journey of the government to increase housing supply in the UK needs to be evaluated. Although it will be challenging to predict how the government will be on point and target to meet the enormous demand for housing, using monetary policy to stimulate the demand for affordable housing.

The objectives of this dissertation is to

Identify the forces creating a barrier to the decrease in the housing supply in the UK.

Evaluate, by critically evaluating the policy relevant to stimulating the supply of housing and to see if the government policy will lead to an increase in housing supply.

Explore various empirical data to include drivers and barriers to affordable housing supply.

Formulate recommendations on the paradigms on how to achieve government targets on affordable Housing supply. (Biggam, 2008)

Relation to previous research

Affordable homeownership is a policy that is often accorded a great deal of policy attention by governments of many countries(DiPasquale, 2011: 354-84). This paper aims to examine the market implications of setting a housing price to income ratio target for a market segment by the government(Fisher, 2009: 34-42). The policy requires active intervention by the government with regard to the targeted sector. The paper uses a simple model of the housing market with a homeownership affordability target to derive the market implications of such targets(Groves, 2010: 263-167). In the presence of uncertainty and resource constraints, the objective of ...