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

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TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION1

Background of the Research1

Research Aim and Objectives2

Rationale2

Recent Developments3

Procedure5

Methodology and Data Collection5

CHAPTER 2: LITERATURE REVIEW7

REFERENCES16

CHAPTER 1: INTRODUCTION

Background of the Research

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. House prices in other property-boom countries such as the US, Spain and Ireland have declined more sharply than those in the UK, and a risk remains that the market could take a further turn for the worse in late 2010 or in 2011. Falling house prices would hit consumer spending, as the feed-through of housing wealth to consumer spending in the UK is relatively strong.

Research Aim and Objectives

The aim of this research is to identify the effects of the recent financial crisis on the residential property market of the United Kingdom. In order to achieve the aim, a few objectives need to be fulfilled:

1.To explore the position of the residential property market in the UK prior to the financial crisis

2.To determine how the financial crisis affected the property market

3.To identify the reasons whether the financial crisis had a positive or negative impact on the residential property market of the UK

Rationale

This research will aid the residential property dealers in the United Kingdom. The aim and objectives of the research will have identified the effects of a financial crisis on the residential property market. The effects may be negative or positive, and will give a few measures to the concerned parties to benefit even in difficult times in the economy.

Financialization is a profoundly spatial phenomenon, representing as it does the search for a spatial-temporal fix or quasi-resolution of the crisis tendencies of contemporary ...