As mentioned earlier the housing prices in a free market environment are generally derived from the equilibrium of the supply and demand curves. The interaction between the buyer and the seller result in the variable prices which are offered by the seller and agreed to by the buyer.Specifically for the UK housing sector, the transaction pertain to the sale of a house is dependent upon the ability and the willingness of the buyer to purchase a property. Aside from this there also exists a price which the seller is willing to take for the property. These two prices have to be adjusted top come at equilibrium in order to determine the market price for the property.
The housing market is termed a sellers market when there is a shortage of good or attractive housing properties. In this case, the demand for the property increases in proportion to the supply resulting in additional power siding with the suppliers. This suppliers market then tends to have a higher price as the sellers take advantage of the situation and increase the price of their properties.
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