The Government has announced today a scheme to help first time buyers on to the property ladder. It has been reported widely in the press with mixed reactions. The BBC article outlines the main proposals (here is the link to The Daily Telegraph). It is interesting from a political point of view that this government should chose to intervene in this market, though perhaps we should not be too surprised as it was the Conservatives that brought in the ‘Right to Buy’ legislation in 1980.

Is this an example of a market that is now failing and therefore needs this type of intervention?

Are tight planning restrictions the problem and therefore should the market be less regulated?

What are the possible ‘unintended consequences’ on the market, house buyers, the mortgage lenders and the government?

There are lots of good supply and demand questions that can be discussed as well as the role of government in correcting markets. Here are a few I will be using today.

1. What are the factors that influence the demand for housing?

2. What are the factors that influence the supply of housing?

3. Using a demand and supply diagram, explain the reason for rising house prices and rents. (consider the possible price elasticities of supply and demand)

4. Outline the reasons why the government has intervened in the market.

5. Evaluate the impact of the government’s key proposals.

Featured
CPD courses

Economics Teachers National Conference 2015

Our popular Economics Teacher National Conference takes place on Monday 22 June 2015 at the superb Wellcome Collection Auditorium on Euston Road in Central London. This is the leading enrichment CPD event for Economics teachers in the UK and always attracts a good number of teaching colleagues from further afield too!Confirmed speaker line-up:Duncan Weldon - BBC Newsnight Economics Correspondent (Economic Policy after the Election)Sir Paul Collier, Oxford University - Where next for Development Economics?Adrian Woolridge (The Economist) - The Great DisruptionDavid Smith (Economics Editor of the Sunday Times) Prospects for the UK EconomyOur delegate prices are:Single Delegate - £175 per personDepartment Deal - £125 per person (for two or more colleagues attending from the same school or college)PGCE / NQT - £75 per person

Learn more ›

Teaching & learning products

Edexcel AS Economics Worked Answers (2014)

Exemplar A Grade answers, with Examiner commentary, to the Edexcel AS Economics Unit 1 and Unit 2 exam papers sat in summer 2014

£5.00

AQA AS Economics Worked Answers (2014)

Exemplar A Grade answers to the AQA ECON1 and ECON2 exam papers in summer 2014

£5.00