Supply and demand explained

This week we’re delving into one of the invisible forces that guides the property market: supply and demand.

It’s not the only force that operates on property (we’ll be looking at some of the others in the coming weeks), but over the long-term it’s one of the most important. We discuss:

• What the laws of supply and demand actually are
• The role it plays in driving the property market
• The supply-side challenges that mean the UK is constantly missing its housing targets
• The various sources of demand that are adding extra pressure
• What this means for the long-term prospects for UK property…and for the country as a whole

News this week

The story that inspired this week’s topic was economist David Smith’s recent article about housing supply and demand. You can follow him on Twitter here.

Resource of the week

Not one but two resources this week, both relating to our main topic.

The first is David Smith’s book Free Lunch, which is subtitled “easily digestible economics”. It’s a great primer if you want to get to grips with the fundamental concepts that make the economy tick.

And if you learn better with video, the Khan Academy series on Microeconomics is another easy way of understanding the same topics.