The London Residential Property Market - Essay Example

But the widely popular credit crunch that has ripped apart most of the world economy has affected the London property prices as well. The toll has been quite heavy for the economy. The effects have been quite brutal to the London property market and with the credit-parched markets of the mortgage have added to the woes of the economy. This has been quite an effect when the capital of UK had seen an 18.6% growth in the year 2006 in its property market. But in 2007 onwards the decline has been quite steady.

Transaction costs economics and the new institutional economics have provided ways in which traditional economic model on the assumptions of maximizing behavior by individuals can be used in understanding the relationship between institutions and the reform process (Craciunesco, 2006). Changes in investment activity, employment, and prices may be a recurring and frequent manifestation of economic development in a competitive and dynamic economy.In today’s economy like in the past, housing has the profound and often unappreciated impact upon the lives of the citizens of each country.

It affects almost our entire lives, from the quality of our lives, our health, and well-being; it determines not only our choice of transportation means but also our choice of work, and status (Baker 2003). The housing also affects our economic well-being, family structure, choice of friends and status in the society. It is with no wonder that, Abraham Maslow classified it under basic need of shelter in his social pyramid.Most often, investors see valuation as the first step toward intelligent investing.

It has been argued (e.g. Penman 2003) that an investor can make informed decisions about where to invest once the value of shares is determined based upon the fundamentals. This is so because, without this value, investors can either buy high or sell low. Investors who trade on these stocks are often forced to ask themselves whether they are buying or selling at the right price.