1. The Housing Market

2. Housing Tenure Owner-occupied Rented: from local authorities
2002: 69.6%
Rented: from local authorities
2002: 13.8%
Rented: from housing associations
2002: 6.7%
Rented: from private landlords
2002: 9.9%

3. The price of houses is the wrong price to look at
Demand for housing
Price of owner-occupied housing
-Theory:▲ price of houses > ▼ demand for houses
-Reality: ▲ price of houses > ▲ demand for houses
Why?
The price of houses is the wrong price to look at

4. DEMAND FOR HOUSES RISES AND FALLS WITH THE LEVEL OF THE BASE RATE
NB not all houses are bought with a mortgage

5. 2. Real income
▲ real incomes > ▲ demand for houses
Slow down/fall in the rise of real incomes will lead to a fall in house prices
Especially an increase in owner-occupied housing

6. 3. Population trends
▲ population > ▲ demand for houses
▲ number of households > ▲ demand for houses
Why?
Longer life expectancy
Increased divorce rates
Single parent families
Younger people move out of home after school

7. 4. Other factors…
Speculation
the belief that house prices will continue rising
Legal changes
Right to buy (1980)
Assured tenancy agreements (1988)

8. Supply of housing 1. Owner-occupied New builds & 2nd hand market
Theory:▲price of houses>▲supply of houses
Costs (land, labour, materials):
▲ costs of houses > ▼supply of houses
Government Regulation: Green Belt/Planning permission
Sale of council houses

9. Not determined by market forces
2. Renting: from local authorities
Not determined by market forces
Government grants to local authorities (1950/60/70s)
Legislation: Right to buy, sale of council houses
Abolishment of funding for new council houses to be built

10. 3. Renting: from Housing Associations
Government grants (1980/90s)

11. 4. Renting: from private landlords
Low rental price
Legislation: Assured tenancy agreements