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How does the UK's housing market work and what are the main factors that influence prices?
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The UK housing market is largely determined by supply and demand. Factors such as economic growth, local transport links, rates of interest, and affordability all have a significant influence on the cost of housing across the country. Demand can grow with employment or population increases, or shift when people look for different types of properties. Supply can be affected by planning restrictions, changes in availability of finance, and changes in the type and cost of labour. There is also a psychological element to the housing market, with prices often rising up to an ‘acceptable’ level rather than a level determined by the market alone.