An Investigation into the Housing Market Essay -- Housing Economics Es

An Investigation into the Housing Market Economics Describe and analyse the changes of housing in the local area over the last 5 years The housing market is one of the most talked about topics in the news. I assume this is due to the high influential potential it holds to the rest of the economy. In this essay I will focus on the causes in house prices. I will investigate how prices have changed nationally and locally. I interviewed an Inter counties estate agent to help my investigation and get his views on the situation. The price of housing fluctuates enormously. Not only does it vary from region to region, but also it is also very volatile within these regions. There are many causes for these unstable prices. According to a spokes person form the Inner county estate agents says there are many factors, which influence the housing market. He believes one of the main factors, which have been influencing the local housing market in the southeast, is the large amount of people coming to work in Cambridge recently. The supply curve appeared to be vertically vertical in the short run. However, the high demand resulted in predictable high prices. Many building companies have also respond to the increases in demand, however this response will not be immediate. Another reason why we saw the price of houses rise was due to the low interest rates. This means the borrowing of money to buy a house is significantly cheaper, which is therefore retaliated with via the increase in the actual cost of a house. London being so close is another major pull factor for people wanting to live as near as possible to where work is more likely to be found. Commuting times and facilities like trains and motorways play a major role in opening up areas as 'commuter land'. People often put up with long commuting distances in order to escape from city living as a family, or to find more affordable housing at greater distance from where they work. This is why Saffron Walden has become so posh, since people have realised the benefits of life in a town of this size in a manageable distance to London. Hypothesis: If interest rates are going down, will increase demand for housing which will then in turn increase house prices. When one buys a house, one is paying for the actual house price, a mortgage, and the interest rates on the ... ...eople willing to pay the higher amounts. Schooling facilities have also got an influence in the area, which is another pull factor for people moving within the southeast. There are also relatively low borrowing costs for mortgages, which will encourage people to buy and sell their houses. According to 'The Hometrack' Property Company, house prices in England and Wales fell in May for the second month in a row. The percentage change in prices over the last year in each region can be seen in the chart. In conclusion prices for housing are high in the southeast due to a number of factors: * The demand for housing in an area, * The supply of houses, * Reputation for the area, * General interest rates influence the house-shopping behaviour, * Low interest rates enables people to buy better or bigger houses, * Facilities in the area, * Local employment chances. Region Higher prices are less desirable, and this may mean many families do not have the economic ability to live in the area. The demand refers to the quantity of houses that purchasers are willing and able to buy at a certain price. Houses are scarce in relation to demand.