Private New Housing

摘要

The characteristics of the UK housing market have substantially changed in the past twelve months. Convention would have had it that upward pressure was perennially exerted on prices by inadequate supply, constrained among other things by the planning system. Pent up excess demand, reflecting long-term failure to match housing requirements, fuelled the scramble onto the housing ladder - partially to secure the housing dividend but also to gain access to a prized class of investment. Investor activity boosted demand further. This process was fuelled by a financial system able to service credit demand at affordable levels with perceived adequaternrisk cover. Over the course of the last year, however, this has changed. New build is falling sharply taking housing starts to levels not seen for many years. The only constant is that the demand is still there but much of it has become ineffective. The 'credit crunch' has drastically reduced the proportion of potential buyers who can put forward an acceptable deposit and mortgage package. This reversal of events has in parallel shaken the confidence of buyers in the housing market bringing about a wait and see psychology and taking even more momentum out of the market, despite recent government efforts.