Why House Prices in UK have increased

House prices in the UK have increased at a remarkable rate since the slump of 1994. With the average house price reaching £200,000 many question how long prices can keep rising. It is important to understand the economic rationale behind the UK’s housing prices boom. Many of these arguments are relevant to other countries as well. Some of the main reasons include:

1. Shortage of supply.
2. Rising number of households.
3. Low long term interest rates
4. Increased flexibility of mortgages

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