Economics HL Demand of Housing

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Name: Rishabh Bhatia

Class: 12T2

Teacher: Mr. Stevens

Commentary Number: 1

Date Submitted: 6/1/2010

Source of article:

Article title: House Prices rose by 0.8% in August compared with July – the second monthly rise in a row, says Halifax

Date of article: 10/9/2009

Date accessed article: 28/11/2009

Section of syllabus linked to commentary: Demand and Supply

Word count of commentary: 749 (including diagrams)

10th September 2009

House prices rose by 0.8% in August compared with July - the second monthly rise in a row, says the Halifax.

Property values were 10.1% lower in the three months to August compared with the same period a year ago, the survey found.

The average UK home was now valued at £160,973, said the Halifax, now part of the Lloyds Banking Group.

A lack of supply and greater demand for homes has pushed up prices in recent times, various surveys suggest.

"Demand for housing has increased since the start of the year due to better affordability and low interest rates," said Halifax housing economist Martin Ellis.

Survey

The survey showed that the monthly change in prices had been upwards in four of the first eight months of 2009.

Prices in the three months to August compared with the previous three months were 1.7% higher, the biggest rise in this measure since July 2007.

The latest rise pushed the price of the average UK home to a few pounds higher than it was at the end of 2008, but still £13,268 lower than in August 2008.

But there was a note of caution in the survey, which pointed out that activity in the housing market remained less than half of the level that was seen in mid-2007.

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A lack of new homes coming on to the market was a significant factor in the latest round of rising prices, and so prices could stabilise again if potential sellers surged into the market.

Changes

The latest figures show a continuing divergence in house price trends in reports from two of the UK's leading lenders.

The Nationwide Building Society, which published its survey for August two weeks ago, said that prices in 2009 had risen by £7,000 since the start of the year - whereas the Halifax survey suggested prices had remained at roughly the same level throughout this year.

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