UK Housing Market Analysis: Demand, Supply, Elasticity & Surplus

This essay provides a microeconomic analysis of the UK housing market, focusing on the dynamics of demand and supply. It examines how factors like income levels influence demand and shift the demand curve, impacting market prices. The analysis incorporates the concepts of price and income elasticity of demand to understand the responsiveness of housing demand to changes in price and income. Furthermore, the essay explores consumer and producer surplus, illustrating how changes in market conditions affect the welfare of both consumers and producers in the housing market. The analysis draws upon an article discussing the decreasing demand for houses in the UK due to higher prices and comparatively low income, ultimately concluding that the UK housing market follows fundamental principles of demand and supply.