Effect of Credit Crunch on Property Market in UK

by

ACKNOWLEDGEMENT

I certify that the work presented in the dissertation is my own unless referenced

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I would like to express my thanks to my advisor, for his suggestions, comments, patience and understanding. Very special thanks to my parents, my father, my mother, my brother and my sister who were continuously supporting me throughout my life and leaving me free in all my decisions. I would also like to thank my colleagues for his technical support whenever I needed. I would like to thank to Department, all the university managers, teachers and students with whom I have worked.

DECLARATION

I declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. I further declare that this work has not previously been presented in whole or part, for any other award, or published in whole or in part elsewhere, including this university. Furthermore, it represents my own opinions and not necessarily those of the University.

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ABSTRACT

This report provides an evaluation of the consequences of the credit crunch for property in UK. It demonstrates that the credit crunch is having a comprehensive impact on investment, development and occupational markets and due to effect of credit crunch on the wider economy the result for property markets and commercial market is uncertain. With its heavy reliance on the financial and business service sector significant falls in transaction levels have already occurred in all sectors of property markets i.e. office, residential and retail markets. Details regarding affordable housing provisions and commercial offices are gathered by conducting an in-depth interview with the local land lords and estate agents hence providing the reasons behind the deterioration in UK property markets.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Background of the Study1

Credit Crunch2

The Credit Squeeze5

Implications for Property7

Research Aims and Objectives7

Research Question8

Hypotheses8

Research Philosophy9

Research Approach9

Research Strategy9

Research Method and Model10

Variables and Measures10

Time scale10

Significance of the Study10

Purpose of the Study11

Scope of the Research12

Structure of the thesis13

Chapter I: Introduction13

Chapter II: Literature Review13

Chapter III: Methodology13

Chapter IV: Data analysis and Discussion14

Chapter V: Conclusion15

Limitations and Suggestion for Future Research15

Summary of the chapter16

CHAPTER 2: LITERATURE REVIEW17

How the market affects the economy17

A Short Overview of Property Investment and Development20

Residential20

Commercial/retail20

Office20

Industrial21

Current Factors Driving the Property Investment Market21

The Credit Crunch24

The Credit Crunch and Property26

The Debt Market and Property Investment28

Property Pricing30

Financial Market Threats to Economic Growth33

The Credit Crunch and Property Investment35

The Credit Crunch and Property Development36

Summary of the chapter38

CHAPTER 3: METHODOLOGY40

Methodology42

Role of the Researcher42

Researcher Bias43

Qualitative Research44

Quantitative Research44

Rationale for a Qualitative Study45

Search Technique46

Research Method46

Primary Data47

Secondary Data48

Research Design49

Types and Sources of Secondary Data51

Literature Search52

Additional Online searches54

Ethical Concerns54

Quality and Verification55

Reliability/Dependability56

Validity58

Summary of the chapter59

CHAPTER 4: DISCUSSION AND ANALYSIS61

Impact on Commercial Offices in Regeneration areas64

The Development Appraisal Process64

Opportunity Areas65

Impact on Policy67

Impact on Transport Related Schemes68

Office Location Factors69

Implications for the Residential Market71

The House Builder's Business Model71

Land Values73

Affordable Housing74

Summary of the chapter76

CHAPTER 5: CONCLUSION78

Current Conditions of UK Office Market78

Recommendations and Suggestions80

Policies for the Future81

Limitations of the Research Study82

Summary of the chapter83

Future Research Implications83

REFERENCES85

APPENDIX92

List of Figures92

CHAPTER 1: INTRODUCTION

Background of the Study

"Credit Crunch" or ...