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Microeconomics article analyses - Essay Example

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Article “Rents rise as supply and demand favors landlords” Analysis & Discussion By 13 May 2011 13 May 2011 Article Analysis The article “Rents rise as supply and demand favors landlords” talks about the supply and demand of money in the housing sector of the United Kingdom…
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Microeconomics article analyses essay
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Download file to see previous pages The demand and supply gap for property is rising in the UK. The accidental landlords, the ones who have rented out their property by chance have decreased after the recent financial crises in the UK. This was the supply side picture of the housing sector, showing the decrease in supply. However, this is not the only reason for the demand and supply gap, an increased demand is also the factor contributing to the gap. The demand has increased because originally people buying houses are being rejected for mortgages due to the financial crises, thus increasing the number of tenants and adding to the supply and demand gap. Thus as the number of first time buyers decreased the rents and the power of landlords increased. This is also increasing private rentals and giving way to the landlord scams in which the more and more tenants are getting trapped. This article is a good example of the supply and demand concept that we have studied in the class. The theory of demand and supply deals with the forces of resource allocation. Demand means quantity required by the buyers and supply is the quantity provided by the sellers. When the law of demand says that demand is inversely proportional to price, the greater the price lesser the demand. The law of supply states that the greater the price the greater will be the supply. ...Download file to see next pagesRead More
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