UK HOUSING ECONOMICS

UK Housing Economics

UK Housing Economics

Introduction

The United Kingdom enjoyed serious property boom for over a decade. The property boom slowed down when the economic melt down commenced in 2008. During the boom years the value of property in the United Kingdom soared, and in some cases the value of properties rose by over 200 percent.

One of the main factors for the boom was that the economy had a long period of sustained growth, further more the interest rates were regulated by the government and kept low. Added to these factors was an upsurge in property investments fuelled by both local and foreign investors. Finally the government kept a tight control on the number of new houses built during that period, so that effectively demand outstripped supply (Haines, 2007, 35).

Currently, the bubble in the property market in the United Kingdom has burst and the market is currently undergoing some reforms. Prices are no longer rising as fast as they were some years ago and there is now an over supply of houses in the property market as home owners are reluctant to sell in this current state. The effect of this is that supply of properties out stripes demand in residential property.

The economic slow down affected all sectors of the property market, however the price of houses in London are slowly picking up and this is due to the weak pound that has made a lot of foreign investors to come in to the UK and invest in properties.

Stake holders are arguing that the Carlsberg review of residential properties should be the bench mark for carrying out reforms in the residential sector as well as all the other sectors of the property market. Further more, the reforms currently going on is aimed at producing better and more information to customers, this lead to the introduction of the Home Owners Information Package (HIPs).

The government plans to regulate the property market, especially the estate agents so that it will no longer be an all comer's affairs. Finally, there is now a standards board in the property industry, although they have limited powers.

On the other hand, the residential property market in Europe is different from the property market in the UK. The residential property market in the UK encourages people to buy their own homes, unlike in Europe, where the emphasis is more on long term renting. Credit is readily available in the UK in order to assist home owners to buy properties, unlike in Europe where it was not easily available. However all this has changed as the residential property market in Europe is undergoing some reforms that has had a great effect on the residential, commercial and industrial properties all over Europe. It appears that most European nations are copying the UK model and are now encouraging its citizens to be home owners instead of renting. Spain is a good example.

Further more, with the opening up of the EU, Europeans can now move to any EU country and acquire property, this ...