The UK Housing Market Assignment Example | Topics and Well Written Essays - 1750 words

The UK Housing Market - Assignment Example There will be a realistic rise in the real estate prices i.e. the prices will not rise too fast.  There will be a realistic rise in the real estate prices i.e. the prices will not rise too fast.  (a) 5% tax on the sale price of each property means a considerable burden for the house-building firms. If such a tax is levied on house building firms, they are bound to pass it on to the retail buyers i.e. it will result is the increase in prices, which in turn means more costly proposition that will ultimately lead to decrease in demand. But some offers on the part of authorities like the offer of low-interest rates to the retail house buyer will help offset this decrease in demand (like in part-a above).  (b) If there’s a significant fall in the prices of construction material like bricks, mortar, and timber then that is definitely a piece of good news for the house building firms as well as the prospective buyers. This will make the housing market more lucrative and competi tive as this will lead to competition amongst the house building firms to offer best bargains to the buyers, which in turn will offer a range of choices for the buyer. This will ultimately result in a considerable reduction in prices. (c) The stamp duty is a must for any house property bought by any individual, as it is tax paid to the government. But supposing Gordon Brown makes an announcement on May 1, 2006, that stamp duty will be doubled w.e.f. then the very first impact it will have is a rush for registering the properties before June 1 and thereafter there’ll be a phase for a couple of months when there will be a fall in the number of property registrations. Thereafter it will not have much of an effect on the prices as such reason being it is not a factor directly affecting the existing prices, but it will lead to some lull in demand.