ABSTRACT
UK government policy has been to support increased demand for housing by a range of means including schemes to increase access to mortgages and taxation subsidies with capital gains and inheritance tax exemptions. A combination of market failures and government actions in the UK housing market has had significant social and macroeconomic effects. These are seen, in particular, in the areas of housing affordability and the levels of homeownership. Government intervention in the housing market also takes the form of housing benefit payments for those with very low incomes with minimal savings and in rented accommodation. The more generic issues with current broken housing markets and the lack of housing supply are set out using examples, largely, drawn from the UK. The taxation system has an indirect effect on the housing market with a regressive council tax scheme with proportionally more of the tax falling on owners of lower value properties.
