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Uk House Prices: An Analysis Of Price Changes

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Business  Economics  and   Management  Science

2010

UK  House  Prices:   An  analysis  of  price  changes  from  2007  to  2009

B000302

Word  count:  1,294  of  the  allowable  1,320  (1,200  +  10%) excluding  Atle  page,  sub-­‐headings,  tables,  bibliography,  and  appendix

15  November  2010

In  the    past  three    years,  the    pricing  trend  of  houses    in  the  UK  has    been  observed  to  rise  unAl    2007,   to  crash  because    of  the    financial  crisis    of  2008,  and  to  recover  slowly   in  2009  (NaAonwide,  2010).       One  can  argue  that  these    prices  are    generally   determined  by   the  behaviour   of  four  stakeholders:   the   investors,   the    financial   insAtuAons,   the    home   owners,   and  the  monetary   authoriAes.       This   essay  will    succinctly   tackle  three    main  points:  a)  how  these  stakeholders  are  inter-­‐related,  b)  how   their   acAons    affected   the   demand,   supply,   and   prices    of   houses,   and  c)   an  examinaAon  of   the   different   housing  demand  elasAciAes.      As  such,  the  essay  will    be    divided  into  three  parts:  before   the  financial  crisis,  during,  and  aYer.    

source:  Halifax  &  NaAonwide  as  cited  on    

Before  the  Financial  Crisis:   low  interest  rates,  high  demand  for  houses,  high  supply  of  credit Following  certain  events    like  the    Dot  Com  Bust  in  2000  and  the  September  11  a]ack  on  New  York   in  2001,  the  US  treasury   lowered  the    interest  rate  to  1%  to  keep  the    economy   afloat  (The  Federal   Reserve,  2003).    Because  1%  is    an  extremely  low  return  on  investment,  many  investors  who  usually   invested  in  government   securiAes  looked  for  other  higher   yielding   opAons.       On  the  other   hand,   financial  insAtuAons    like    banks  were  able    to  increase  their  borrowing  at  1%.    At  this    rate,  they  were   gegng  cheap  credit  and...

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MLA Citation

"Uk House Prices: An Analysis Of Price Changes". Anti Essays. 13 Dec. 2018

<http://cassandralynndesignllc.com/free-essays/Uk-House-Prices-An-Analysis-Of-74444.html>

APA Citation

Uk House Prices: An Analysis Of Price Changes. Anti Essays. Retrieved December 13, 2018, from the World Wide Web: http://cassandralynndesignllc.com/free-essays/Uk-House-Prices-An-Analysis-Of-74444.html