The London Property Market

Paper Summary:

The paper researches the housing market in the UK, focusing on central London and defines forecasts for its' future movement based on historical performance of this market segment. The paper employs the economic theory relevant to the subject of the study to distinguish empirically proven models of house prices and their underlying factors. The paper considers and compares empirical research of active market players in the UK housing investment market and examines their conclusions as to market movements. The paper concludes that the UK economy is very strong at the moment but is very open and thus is dependant on external factors rather than internal factors.

Outline:
Objective
Methodology
Economy of Property Markets
UK Economic Forecast
Economy of UK Property Market
Conclusions

From the Paper:

"The development of the real estate market and all its' segments depends on the development of the economy and it is necessary to fully understand the pass through mechanism and factors within overall economic development influencing real estate markets irrelative of the country. The economic condition of the country is usually measured by Gross Domestic Product (GDP) and GDP per capita adjusting it for the purchasing power parity within each country. Gross Domestic Product is most often measured as the sum of the households consumption, investment levels, government expenditure and net exports which equals to exports minus import into the country. GDP is the official name of the indicator used within economic theory as total output and the full employment model is employed to explain the movements and drivers within the economy."

Sample of Sources Used:

• Available from: http://www.infra.kth.se/byfa/utbildning/grundutbildning/kurser/BusinessCycles_1N1303/7
• CSFB.
• Farlow, A. UK House Prices, Consumption and GDP, In a Global Context, University of Oxford, 23 January, 2005.
• Farlow, A. UK House Prices: A Critical Assessment, Credit Suisse First Boston, Version: January, 2004, Department of Economics and Oriel College, University of Oxford.
• Farlow, A., Housing, consumption, and the economy: Why do house prices become misaligned, and what are the consequences?, Guest Lecture, The London Business School, 2 June 2005, available from: http://www.economics.ox.ac.uk/members/andrew.farlow/24

More papers on The London Property Market:

• Analytical Essay # 61885 : "The United Kingdom Property Market"
• Essay # 42104 : "Venice Preserved" and "The London Merchant"
• Analytical Essay # 4896 : "The London Merchant"

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