Effects on Determinants on Supply and Demand in the Housing Market
The housing market, specifically domestic housing is seen to be large and very fragmented around Britain. The housing market is similar to any other markets which concludes with the buyers agreeing with the sellers on a certain price for the property. For the housing market the supply will always stay inelastic as prices are always changing. There are a number of different variables which can effect the demand and supply of the housing market such as the buyers ideal location of a home, somewhere which is suitable for raising a family or practicality reasons such as work. Most households need homes, which gives us an indication of how much households are willing to pay looking at their income and by the accessibility of …show more content…
This table represents all types of properties over Britain with different variation of prices and how prices are effected in each area. The Greater London and the South East regions show an average of over £200,000 compared to Northern Ireland and Scotland ranging from £123,000 and under on average. This is essential to housing buyers on which can effect their decision making because of these high average prices. This can lead to a downfall in demand in many places such as Greater London and the South East as prices seem to be on the rise in many places. But for the South East, there is a much higher average of sales compared to areas such as the North and the North West which have a much lower average price but seem to have a lower sales than the South East. So therefore this shows that the supply of domestic housing must on the increase because of the significant rise of sales in the South East area.
The supply and demand graph shown above demonstrates S as the original supply curve over recent years of average domestic housing prices and the recent change in the average price in 2005 as S1. The S1 shows us that even though the average prices have gone up in this area there is