UK HOUSING MARKET

UK Housing Market



Question 1a

According to the report Halifax, the largest mortgage lender, house prices in the UK fell 2.4% in May. Prices fell by 3.8% lower than last year and this means that the average home price fell to 184.111 pounds (Ross 2004, pp. 3-5).

The Bank of England said that it left interest rates unchanged, equal to 5%, despite requests from real estate agents and construction companies to lower rates.

A variety of mortgage loans were denied, with interest rates of banks have increased, despite the fact that, starting in December, the rate was reduced three times.

Limitation of Costs

Halifax said the annual decline in prices is the highest since 1993. If prices continue to fall at the same rate that was observed from the beginning of the year, then they will fall by 16% over 2008.

Review Halifax echoed findings of a recent study of nationwide building society, which reported a fall in house prices in May at 2.5%.

Also, the Bank of England's data showed that the number of mortgages approved for house purchase in April, has been minimal, starting from the moment when the bank began publishing data in 1993 (London Mayor's Housing Commission 2000, pp. 34-35).

He pointed out that average earnings rose by March to 4% per annum, much lower than gasoline prices, which rose 9% and food prices, which increased by 7% (Ross 2004, pp. 3-5).

Hard times

Halifax has already predicted that house prices will probably decline next year as well as in 2008. In subsequent weeks, increased signs appeared of the declining economy of Britain, which moving towards more long and hard economic slowdown than many believed at first.

As official data showed that the newly published British economy shrank in the third quarter of last year; faster than previous estimates than previous estimates, where GDP fell to levels not seen since 1990.

The Office for National Statistics said Britain's economy shrank by 6.0 in per cent between the months of July and September in year 2008; the pace is higher than previous estimates of $ 5.0 in percent. Howard Archer, chief economist at Global Insight, said that studies of the GDP of Britain may record a contraction rate of up to 1 per cent during the last quarter of this year (Le Grand, Propper & Robinson 2002, pp. 66-67). Experts predict interest rate cut to less than 2 per cent after the reduction of the standard announced by the bank earlier last month. The British Government believes that the plans of the financial rescue and revive the economy with a large budget will restore the economy to the path of growth during the second half of next year.

Rise in House Prices

In September 2009, the growth in housing prices in the UK amounted to 0.2 percent. As reports Bloomberg referring to the company Hometrack, a record level since July 2007.

Currently, the average price of homes in England and Wales amounts to 156.1 thousand pounds, up 5.6 per cent below the same period last ...