Economics of housing Essay Example | Topics and Well Written Essays - 3000 words

Economics of housing - Essay Example The two main historic junction points that can be identified are in the years of 1915-1919 and also in the year 1979. Occupation of ownership as well as social housing amplified their comparative size in the period of 1915 to 1979. At the same time the private renting contracted drastically. After 1979 till the early phases of 2000 owner occupation augmented at the cost of social housing. Since the year 1995 the comparative size of the private rented sector began to take the steep rising curve. The trends in tenure can be accounted to be the combination of political, economic as well as social drivers that played their role in the short and in the long run. Political transformations like supports from the local government and Rights to Buy interacted with the cycles of the economy to bring changes in attitudes to different tenures. The current trends suggest a mix in tenure of the housing system of UK. For the first time the comparative size of the owner occupied sector took the decl ining curve while at the same time the private rented sector took the oppositely sloping curve. The reason for such a drift may be the supreme numeral of households in owner occupation while the social rented sector remained stable. In the phase of 2005 to 2009 the number of households in the private rented sector augmented by more than one million households. ... If the recent trends sustain in 2013 then the private sector is expected to be larger than the social rented sector. Forecasts also point to the fact that by the end of the decade one in every five households would be private renters. The forecasting trends are based on the continuation of the recent trends. The figures point towards quick changes in tenure mix but the figures do not state how quickly the changes would take place. The key drivers that forced the recent changes in tenure mix are depicted in the diagram below: (Pattison, Diacon and Vine, 2010, p. 5). The three pillars taken in the diagram are owner occupation, private rented sector as well as social housing. The panel above the key drivers are regarded to be the drivers that act to increase the relative size while the panel below the drivers act to decrease the relative size. The structures above the pillar of owner occupation are tax advantages relative to other tenures, political support, preferred tenure and the Rig ht to Buy sales. The structures above the pillar of private rented sector are affordability relative to owner occupation, lifestyle changes increasing desire for mobility. The structures above the social housing pillar are financial stability, demand for social housing. The structures below the pillar of owner occupation are income constraints, wealth constraints and mortgage constraints. The structures below private rented sector are investment constraints, lack of political support, and tax incentive relative to owner occupation. The structures below social housing are Right to Buy sales and pressure on government spending. Question (ii) The report published by the HomeOwners Alliance states the owner occupation in UK is set to go below