{"id":2618,"date":"2017-04-13T17:00:59","date_gmt":"2017-04-13T16:00:59","guid":{"rendered":"https:\/\/www.buyassociation.co.uk\/?p=2618"},"modified":"2023-09-28T16:18:01","modified_gmt":"2023-09-28T15:18:01","slug":"really-driving-inflation-uks-property-market","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-gb\/news\/really-driving-inflation-uks-property-market\/","title":{"rendered":"What is really driving the inflation of the UK\u2019s property market"},"content":{"rendered":"<p><strong>According to a new academic research paper, the assumption that Britain\u2019s house price growth over the last few decades is driven by the gap between supply and demand is pretty far from the truth.<\/strong><\/p>\n<p>Even if you\u2019re not the keenest reader of property news, <a href=\"https:\/\/www.buyassociationgroup.com\/en-gb\/2017\/04\/05\/continuing-rise-generation-rent-best-friend-private-rented-sector\/\" target=\"\" rel=\"noopener\">don\u2019t own your own home and maybe don\u2019t even have an interest in ever doing so<\/a>, one property headline quite possibly didn\u2019t sneak past you: The UK\u2019s property market\u2019s supply is too low and demand is too high.<\/p>\n<blockquote class=\"wp-embedded-content\" data-secret=\"Zc10MV1sPP\"><p><a href=\"https:\/\/www.buyassociationgroup.com\/en-gb\/2017\/03\/10\/uks-rental-market-letting-vulnerable\/\">Is the UK\u2019s rental market letting down those most vulnerable?<\/a><\/p><\/blockquote>\n<p><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Is the UK\u2019s rental market letting down those most vulnerable?&#8221; &#8212; BuyAssociation Group\" src=\"https:\/\/www.buyassociationgroup.com\/en-gb\/2017\/03\/10\/uks-rental-market-letting-vulnerable\/embed\/#?secret=6zM808fz9P#?secret=Zc10MV1sPP\" data-secret=\"Zc10MV1sPP\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p>In a new paper, however, Dr. Alisa Yusupova from Lancaster University suggests that <a href=\"https:\/\/www.buyassociationgroup.com\/en-gb\/2017\/03\/23\/house-price-growth-impressive-high-midlands-turn-tables\/\" target=\"\" rel=\"noopener\">Britain\u2019s house price growth<\/a> is based on speculation and exuberance rather than a gap between supply and demand.<\/p>\n<p>An abstract from the paper states:<\/p>\n<blockquote><p>\u201cNeither demand-side factors such as household income, mortgage rates and credit availability, or the supply of new houses explain price rises during some of that period. We find that a comprehensive model of housing that includes demand side factors such as household income, mortgage rates, credit availability, demographics, inflation as well as supply side factors such as supply of new houses relative to the growth in working age population, and regional spillover effects, cannot fully capture house price dynamics in certain periods of the sample.\u201d<\/p><\/blockquote>\n<p>Instead of simply blaming a lack in supply, Yusupova argues that bubbles of <a href=\"https:\/\/www.buyassociationgroup.com\/en-gb\/2017\/02\/01\/swindle-land-research-reveals-amount-gazumping-uk-property-market\/\" target=\"\" rel=\"noopener\">\u201chouse price exuberance\u201d<\/a> have started off in London and then made their way through the country.<\/p>\n<blockquote class=\"wp-embedded-content\" data-secret=\"xxcFcxf1mQ\"><p><a href=\"https:\/\/www.buyassociationgroup.com\/en-gb\/2017\/03\/31\/house-price-index-figures-overstated\/\">House price index figures &#8216;overstated&#8217;<\/a><\/p><\/blockquote>\n<p><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;House price index figures &#8216;overstated&#8217;&#8221; &#8212; BuyAssociation Group\" src=\"https:\/\/www.buyassociationgroup.com\/en-gb\/2017\/03\/31\/house-price-index-figures-overstated\/embed\/#?secret=DewYYKSUn1#?secret=xxcFcxf1mQ\" data-secret=\"xxcFcxf1mQ\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p>Since the 1980s, house prices have climbed drastically across the country, with the most significant inflation happening after the global financial crisis.<\/p>\n<p><strong>Here a chart of the figures collected by the Office for National Statistics (ONS):<\/strong><\/p>\n<p>Whether or not Yusupova is on the right track with her theory remains to be seen. She is, however, not the only one to put this thought forward. Societe Generale strategist, Albert Edwards, only last year <a href=\"https:\/\/www.buyassociationgroup.com\/en-gb\/2016\/09\/01\/bank-england-property-better-bet\/\" target=\"\" rel=\"noopener\">blamed the Bank of England<\/a> for inflating a bubble in Britain\u2019s housing market.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to a new academic research paper, the assumption that Britain\u2019s house price growth over the last few decades is driven by the gap between supply and demand is pretty far from the truth. Even if you\u2019re not the keenest reader of property news, don\u2019t own your own home and maybe don\u2019t even have an<a class=\"excerpt-read-more\" href=\"https:\/\/www.buyassociationgroup.com\/en-gb\/news\/really-driving-inflation-uks-property-market\/\" title=\"ReadWhat is really driving the inflation of the UK\u2019s property market\">&#8230; Read more &raquo;<\/a><\/p>\n","protected":false},"author":1069,"featured_media":4404,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[6],"tags":[35,52,53,37],"class_list":["post-2618","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk-housing-market","tag-property-prices","tag-property-shortage","tag-supply-demand-gap","tag-uk-property"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/2618","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/1069"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=2618"}],"version-history":[{"count":1,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/2618\/revisions"}],"predecessor-version":[{"id":6096638,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/2618\/revisions\/6096638"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/4404"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=2618"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=2618"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=2618"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}