Unlike many other countries (for example the United States) the UK is actually a very small space geographically considering how many people live here. Space to build new housing, particularly in urban areas is extremely limited. This has the simple effect of limiting the supply of new housing that comes on to the market

With a growing population demand has never been higher. Many people cite the large numbers of immigrants moving to the United Kingdom from Eastern Europe as having a huge effect on the demand for housing. Even if these migrant workers do not buy, they still need to live somewhere, namely in rented or buy to let accommodation.

The net affect of this increase in demand and limited supply will obviously push prices higher. Obviously the higher property prices move, the less affordable housing is to those with low incomes. However prices have not fallen? The reason may be explained buy the recent boom in buy to let property purchases. Many individuals on relatively high incomes have entered the buy to let market and become landlords. More often than not their prospective tenants are those on low incomes that simply can’t afford to buy.

As can be seen there are many reasons why the housing market may not be destined for a crash. Although a slowing economy may have an effect the fundamental indicate that a crash may not be the certainty that some people feel is just around the corner.