Recent developments in the UK housing market

Then again the UK economy had to face recession in the last two years which had an impact on reducing the UK house prices and at present they are still below the prices which were observed previously before the onset of GFC (Bardhan, Edelstein, &amp. Kroll, 2011, p. 176).
Next if we look at the regional differences in UK related to the changes in house prices it can be observed between 1998 and 2009, most of the regions in UK showed a similar pattern of rise and fall of housing prices. Northern Ireland and Scotland were the exceptions which showed slightly different patterns in price changes because of reasons like different types of housing market in these regions and lower starting level of house prices. However, post 2009, the growth in house prices was observed to be regionally diverse in UK. Highest growth in house prices which were significantly higher than the average UK housing prices were observed in London area followed by the South East region in UK. It is mainly attributed towards the low interest rates and increasing demand of housing property as an avenue for investment (Higson, 2011, p. 83).
In general house prices must behave in a similar manner as that of inflation rates prevailing in an economy. However if we consider the recent boom in housing prices in UK since the year 1998, it can be observed that the housing prices behaved in an opposite direction to that of the general inflation rate of the UK’s economy. It implies that there has been a significant rise in the overall house prices of UK since 1998 but the general inflation was on the lower side and did not rise that significantly as compared to the house prices. It means that although the house prices rose significantly the prices of other goods and services did not rise that much.
Next if we look at the relation between the house prices and income of the households in UK it can be observed that the house prices increased at a greater