UK+house+prices+rise+in+January+by+Marco

//**REMEMBER: DO NOT SUMMARIZE THE ARTICLE!!!**//

=TITLE OF EXTRACT:= UK house prices rise in January

=SOURCE:= http://www.telegraph.co.uk/finance/economics/houseprices/9064704/UK-house-prices-rise-in-January-Halifax-says.html

=DATE EXTRACT WAS WRITTEN:= 03/06/2012

=DATE CURRENT EVENT WAS WRITTEN:= 03/06/2012

=EXPLANATION OF THE ECONOMIC THEORY RELATED TO THE ARTICLE:= Current house prices in the United Kingdom rose 0.6pc in January. It was the first rise of home prices since October last year with an average price of a house in the UK at £ 160,907. There were 1pc falls in November and December and this led to the rise in January and this rise is what caused the highest price of houses during January, at £163,609. According to a housing economist at Halifax, said low interest rates had helped to prop up the housing market, but warned the outlook depended on the economy's ability to weather the current economic storm. Because of this rise of house prices, the recent improvements in employments in the UK supported the demand of these houses. Another important economic statement by the economist is " Prospects for house prices over the coming months will, to a large extent, depend on events in the eurozone and the repercussions of developments there for the UK economy. If the UK can avoid a prolonged recession, we expect broad stability in house prices in 2012." This explains that in this situation, the UK will be able to stabilize as long as there is no economic decline or reduction of industrial and trading activity. It is estimated that the house prices will fall by 5pc in the current year. Also, the low-wage growth and rising unemployment will limit potential buyers.

=VOCABULARY TERMS AND DEFINITIONS:=
 * Price - the amount of money expected, required, or given in payment for something
 * Interest - money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt
 * Market - an area or arena in which commercial dealings are conducted
 * Demand - the desire of purchasers, consumers, clients, employers, etc., for a particular commodity, service, or other item
 * Recession - a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters
 * QE Programme - Quantitative easing program, the introduction of new money into the money supply by a central bank
 * Mortgage - the charging of real (or personal) property by a debtor to a creditor as security for a debt, on the condition that it shall be returned on payment of the debt within a certain period

=DIAGRAMS:= This is a graph of the subsidy that should take place, where the government will resolve the problem by subsidizing and lowering the price of the houses for consumers in the population.

=EVALUATION:= The problem created here is that the price of houses in the UK are rising too unexpectedly rapid and can be too high a price for the average population to afford. However, there are factors that have naturally occurred to aid this situation, such as the expected low wage growth, increasing unemployment and concerns over the persistant economic situation and outlook which will ultimately limit potential buyers and weigh on house prices. Another aspect is the house prices largely depend on economics events the development and European economic activity, and will stabilize as long as there are no recessions in the UK. Because it is likely that an economy will naturally avoid recession, this problem is also resolved without much additional work. In order to solve this problem, the government could subsidize for the price of houses to lower it for the general population and make it affordable. Because this is a wide-scale or macro problem within the economy, it is difficult to lower the actual cost of the houses.