Remember the housing [under supply] crisis before the crash? Since the crash began supply of homes has plummeted to a forecast c60-70k homes to be built this year. Construction capacity will take years to be rebuilt and government estimates require minimum 240k homes to be built a year to keep pace with demand. Price elasticity of demand – prices will rise.
Further evidence of the impending supply/demand crunch (leading to high future house price rises) check out this article – http://www.timesonline.co.uk/tol/life_and_style/health/article6337491.ece. 708,000 babies were born in the UK last year, 19% up on 2001.
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