The British economy continues to show a strong growth and low inflation, but what is the main cause of the house prices rise and fall in the UK? Is it because there are too many people in London and other areas? Or is it because of the real estate market in the UK, which is dominated by developers?
What Are The Influencing Factors?
In the UK, there are many factors influencing the prices of houses. But the biggest one is the economic condition of the country. Since the UK has a high rate of unemployment, and a low gross domestic product, the real estate market in the country suffers a lot.
Tourist
The other factor that is affecting the real estate market is the high number of tourists in the country. As many as 20 million tourists visit the country every year. And there are some countries, where tourists account for 70 percent of the population.
Demand
The house prices are influenced by the demand and supply of the real estate. When there are more people looking for a house to live, then the price of the house will also go up.
On the other hand, when there is a surplus of the real estate in the country, then it means that the price will decrease. This is because there is no buyer who wants to buy a property.
Another reason why house prices in the UK are not affected by inflation is because there is a shortage of property in the UK compared to other countries. Many developers try to buy properties before inflation occurs. They will keep the price of the property stable when the demand of the market is high and low when there are less people buying houses. the house prices are not affected by inflation is the real estate agents are not affected by this. The agents do not like the inflation because they make their living from the real estate market. So they will not help the investors in paying a little bit more money for the house, if it means that the price of the house will increase.
Takeaways
When there are many developers in the market, there will be an increase in house prices. The high development in the market will attract many people who want to live in those houses.
So the real estate market is a combination of the demand and supply. There are many reasons why house prices are affected by inflation in the UK.
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