Question

Policy 4 is described below, based on examples of measures that have been introduced or proposed in the UK, in response to a chronic shortage of affordable houses in many regions.

Drawing on the module material, write an essay that explains, using the ‘demand-and-supply’ model, the likely impact of each policy on the equilibrium quantity and price of houses, and how this might affect the UK’s affordable housing shortage.

Policy 4

The government has introduced a three-per-cent stamp duty surcharge that property owners are liable to. Some observers have said that this would push amateur buy-to-let landlords out of the market, as they are less well resourced to cope with the tax change compared to corporate developers. Most of the landlords who might be pushed out of the letting market by this measure are wealthy parents investing for their children’s future or those who have inherited properties.

Answer 1

Answer

The policy 4 made in response to the chronic shortage of affordable houses in UK is a good measure to curb the housing problem especially for below average and average income people in UK .According to the observers it will push the amteur buy to let the landlords out of thge market and will benefit the corporate developer for housing construction who will then sale those houses for the economic boost .That is the whole outcome of this policy that the corporate developer will use the lands and will sell it at affordable prices The then supply of the house when increase will decrease the demand and will set the equilibrium prices of the house at lowest .In this way it will be affordable and reasonable .Bu the drawback is the loss of the landlords because of this policy .as they will have to pay a 3% stamp duty surcharge which is not possible for everylandlords to agree and will make them suffer and let out of the markets .Especially those who have inherited properties will also suffer .

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