Recent Developments in the UK Housing Market Essay - 1

Recent Developments in the UK Housing Market - Essay Example The researcher states that the government should renovate existing houses because the households earning low incomes are entirely relying on private rented sectors that are not regulated. These areas are characterized by poor living conditions and security. It is important for the government to develop more housing because there are more than 1.7 million families on local authority housing waiting lists. This is a significantly huge number. The government should ensure that the new houses are environmentally friendly and affordable to everyone needing them. The first time buyers in the UK property market are important because they act as liquidity source to the whole housing market. These first-time buyers generally bridge the gap thus enhancing transactions as regards the housing property. The rates of transactions that proceed in the housing market may stall if the first time buyers are unavailable. Between 1998 and 2007, house prices increased steadily in the United Kingdom, makin g the ownership for the first buyers to be unaffordable. Interest rates for the first time buyers affected them to a comparatively wide margin. This is because the group may not have built up a previous equity and many of them may be earning low incomes than other people. When the first time buyers think of house affordability, they first consider the real interest rates given. On the other hand, the first time buyers may face more severe affordability burdens when prices of houses quickly upsurge. Lastly, it is imperative to note that structural shifts in mortgage or credit availability are other factors that led to fall of first-time buyers purchasing homes. In 2010, the government introduced a mortgage rescue scheme that protected the low-income households from being recuperated. The mortgage scheme consisted of two parts including the equity loan which was an interest loan issued by various housing associations. The interest rates could pay off between 25% and 75% of the mortgag e rates thereby reducing monthly costs. On the other hand, an interest rate of 1.75% was implemented on the loan.