THE STRUCTURE OF THE HOUSING MARKET IN THE UK

The housing market can be examined at a national level, eg we can say that the average price of a house in the UK is now over £100,000. To get a more detailed analysis, the market can be broken down into different categories.

By Tenure

The housing sector is broken down by ownership:

  1. Owner occupied

  2. Private rented accommodation

  3. Housing association property

  4. Local authority housing 

Each segment can be examined in terms of the supply and demand of property in the market, price setting and government intervention to influence price and supply and demand. Segments can also be examined historically to see what has happened to them over time, eg the numbers of property in each segment.

Housing stock, by type

Stock type 1938 Dec 1979 March 2001 (provisional)
All tenures: number of dwellings 10.6m 17.7m 21.1m
Owner-occupied 32% 56% 70%
Privately rented 57% 13% 10%
Local Authority rented 11% 29% 13%
Registered social landlord (RSL) rented n/a 2% 7%

Source: DETR

See also Anderton AS Level Economics Page 28 for data on the stock of dwellings over time. The general trend has been a growth in owner occupied properties, whilst renting from private sector landlords and local authorities has fallen. There has been an increase in the number of properties rented from housing associations.  There have been several explanations for these changes:

  1. rising incomes encouraging people to but their own property

  2. deregulation of the financial markets allowing more lenders to enter the market giving buyers more choice of lender

  3. government dislike of public provision of housing

  4. government policies eg "right to buy" encouraging individuals to buy their own property

By type of property

Within in each segment there will be different forms of property

  1. Detached

  2. Semi detached

  3. Terraced

  4. Flats

By Region

These properties will vary in price across the country. We can use supply and demand analysis to offer explanations as to why property prices are higher in the south of the country than in Mid Wales for example.

Go to the Council of Mortgage Lenders site for information on regional house price changes since 1969 and click on regional house prices.

Explanations for these regional variations include:

  1. Demand considerations

  1. different income levels

  2. different unemployment rates

  3. population densities

  1. Supply considerations

    1. factor prices

    2. availability of land

    3. number of properties come onto the market

    4. new properties being built

 

 

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