Housing market
- Consumer spending and confidence
- Consumption culture & personal debt
- Interest rates
- Credit crunch
- Economic downturn
- Poverty and inequality
Related news
Members' notes
MarkAfter over a decade of booming house prices which priced a large proportion of the population out of the market, house prices had their biggest fall on record in 2008, a fall of 16%. Prices have been rising since April 2009 and are now within 10% of their peak in 2008. There are also regional differences with prices rising fastest in England but still falling in Northern Ireland. The fall in house prices is partly a knock-on effect from the worldwide economic slowdown as the result of the ‘credit crunch’ which has left banks less willing to lend mortgages.
What are the implications?
- An increase in repossessions and the number of home-owners in negative equity.
- Reductions in interest rates to their lowest levels ever in an attempt revive lending.
- However, the continuation of a low value pound and underlying long term inflationary pressures may instead build pressure for the BoE to raise interest rates once the economy picks up slightly exacerbating the problem by increasing the cost of mortgage repayments (see inflation).
- Potential decrease in the proportion of levels of personal debt due to mortgages as first time buyers purchase houses at lower prices.
- Falling rental prices as more people rent properties they are unable to sell, creating more supply than demand.
- Increased wealth inequality as some sections of the population are unable to buy their first home and some people are more affected by rising mortgage rates than others, however falling asset prices may balance out wealth inequality overall.
- Prohibitively high mortgage deposits for first time buyers may impact on levels of consumer spending and levels of giving.
Moving forward:
This may be a good time to invest in buying premises for your organisation if you have the necessary capital. Likewise, it may be possible to renegotiate your rent if you are in an area with a surplus of rental properties on the market.
The housing market is closely linked with levels of personal debt and with poverty and inequality. If these are issues that are important for your organisation to respond to, take a look at those drivers to explore implications and potential actions.
Want to know more?
Housing market recessions and sustainable home ownership
Published by: Joseph Rowntree Foundation – a think tank
Date: July 2008
Format: PDF (536KB)
What is it?
A review of the current evidence on housing, with a bias to social justice.
How useful is this?
This is a good report, with clear discussions of the challenges faced. It also provides policy recommendations and an excellent list of references.
Other comments:
UK Housing Review 2007/8, 16th Edition
Published by: Chartered Institute of Housing – a professional body for people involved in housing and communities
Date: 2008
Format: Online; PDFs of individual chapters
What is it?
A thorough review of the available data on housing in the UK. This provides charts and tables as well as discussion of a broad range of themes. The commentary chapters focus on: Housing, the economy and public expenditure; Dwellings, stock condition and households; Private housing; Housing expenditure plans; Housing needs, homelessness and lettings; Help with housing costs.
How useful is this?
This is ideal if you are carrying out a more detailed analysis of housing. For those looking for a shorter summary, it may be too much, although the information is broken down in a sensible way.
Published by: The Guardian – a left-of-centre broadsheet
Date: September 2008
Format: Web
What is it?
An outline of some potential implications of the current housing crisis. In particular, the author argues that the crisis may be an opportunity to break the link between homeownership and wealth acquisition.
How useful is this?
The article itself gives a coherent account of some of the main issues. Some of the responses are thoughtful and worth reading, others less so: at the least, these give a range of viewpoints currently held in this (highly non-representative) sample of the UK population.
Recession tracker: reposessions
Published by: BBC
Date: n/a
Format: Web
What is it? Data on repossessions in the UK.
How useful is this? The tracker is very accessible with graphs to illustrate the trends.
Published by: Communities and local government, a government department, based on ONS data
Date: Monthly
Format: Web and PDF
What is it? Monthly updated data on UK house prices including breakdowns by country and region.
How useful is this? There is an archive back to 2006.
Recent comments
Jemma
NCVO Research TeamI’m interested to know what the impacts of a growing rental sector are for the sector and more widely. For instance, how will rental houses measure up in terms of energy efficiency? What are the incentives for landlords and tenants to be more energy efficient? Also as more people rent, will more support be needed to help both tenants and landlords know their rights and settle disputes?
Karl
Third Sector ForesightI wonder if the answer to this question lays not so much in the implications of a bigger rental market per se, but the implications of some parts of the rental market getting larger. In particular, the private sector is gaining a foothold in the provision of social (i.e. rented) housing as government (specifically the Housing Corporation) creates a mixed economy of providers including the private sector. David Mullins (well worth googling if you are interested in housing and futures) and Bruce Walker argued last year that the hoped for improvements in efficiency from this move might drive up innovation and drive down price.
The implications for the third sector therefore of a larger rental market with more players are pressure on price (whatever the ‘full cost’) and the need to respond to more efficient practices. See Mullins and Walker’s presentation here
More broadly, I wonder if some implications are a greater distinction between the haves and have nots in society, with the haves being the house owning majority? And I wonder what the implications are for engagement and social capital? It might be interesting to look at (for example) census data and see what correlates with rented accommodation housing status.
Join the discussion!
How will this affect your organisation? Have you considered it during your strategic planning? Can you share any interesting relevant links?
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