Effects of the Recent Financial Crisis on the UK Residential Property Market

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ACKNOWLEDGEMENT

I would like to take this opportunity to thank my lecturer who has always shown confidence in me. He has offered his patience, remarks, propositions and understanding. Here I would also like to mention my parents who have always believed in me for all my hard work. My family, including my parents, brother and sister have endlessly supported me during my life and academics. This has helped me in making positive decisions for my life. I would also mention my peers and co-workers and appreciate their collaboration and expert advice on every circumstance. I am also grateful towards my University and my Department, the administrators, faculty members and fellow students for their support throughout this study.

DECLARATION

I declare that the material stated in this dissertation/thesis is original and does not present work of any other scholar or research study conducted in the past. Material in this study is not partially or completely published elsewhere and collected only for the purpose of this study. I also acknowledge that I have complete understanding of the requirements, guidelines, regulations and procedures of the University with respect to the endowment of higher education degree and my research work. Here, I would also like to take the opportunity to declare that I have almost exclusively followed the requirements, guidelines, regulations and procedures of the University regarding this research study.

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

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ABSTRACT

The financial crisis took root in the United States of America, and spread to the United Kingdom and other countries the world over. There were numerous things that lead to the financial crisis like the process of globalization that has been occurring since the part thirty years. The crisis began in the sub- prime markets in the United States and spread to the United Kingdom, remainder of Europe and the world. The world's markets were and still are highly integrated. The next trigger was the increase in leverage of the household sector and the corporate sector by way of the sub- prime crisis. Furthermore, this lead to having effects on the entire financial system. Additionally, majority of the risks were underestimated mostly in the corporate sector.

The strength of the housing market will remain key to consumption trends in the UK. A buoyant housing market was an important driving force for strong GDP growth earlier this decade, boosting employment (in industries related to construction and mortgage origination) and private consumption (as rising house prices made households feel wealthier). The property market boom saw UK house prices rise far above their historical average on almost every measure (relative to disposable incomes, gross average earnings or rents). House prices fell throughout 2008 and in early 2009, but over the past year have surprised many observers by recovering considerable ground, albeit in part owing to very weak supply trends. The primary objective of the overall study is to provide a clear understanding of the impacts of the credit ...