Conclusion

In this free course, Rent or buy? The challenge of access to housing, you have:

• explored why people aspire to buy their own home and the risks involved
• considered whether buying a home is affordable and how this relates to the wider economic, social and political climate and in turn what affects house prices
• looked at how home ownership is linked to the financial balance sheet, and different measures to summarise a household’s financial position in relation to assets and liabilities
• examined a simple model of supply and demand for housing to visualise how different factors can influence house prices and the number of sellers and buyers on a specific market.

Although choices about housing are individual, tastes and conventions also reflect variations in culture and norms around the world. Our homes have a deep significance for us as well as playing a very large role in our financial arrangements.

For these reasons, decisions about where to live and whether to rent or buy are some of the most important that we make. These decisions are made within an economic and social context and are often constrained by this context. The volatility of property prices under the forces of demand and supply can mean our financial position fluctuates in ways we cannot control. Rising real prices in recent years have meant there is a large generational difference in tenure, with younger people more likely to be renters than owner-occupiers. Those who are longstanding owner-occupiers have seen their investments in property grow. For many households however, the dream of owning a property remains unachievable as they lack sufficient resources even to start building a deposit, and often rely on subsidised rent by the government to be able to live under a roof. For many more still, in less developed countries, households may own their home de facto, even if that home is a makeshift shelter in a slum.

We hear a lot in the media about a housing crisis where supply falls short of demand, and there is no doubt that government policy needs to address this so that everyone can find somewhere affordable and decent to live.

This OpenLearn course is an adapted extract from the Open University course DB125 You and your money [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] .