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# Explain possible reasons why the price of houses has increased in recent years
- URL: https://www.a-level-economics-tutor.com/explain-possible-reasons-why-the-price-of-houses-has-increased-in-recent-years/
- Published: 2026-10-02T15:49:13.000Z
- Updated: 2026-10-02T15:49:18.000Z
- Author: Jaisul Naik
- Tags: AQA 10 mark question

### [AQA AS-Level Paper 1 June 2025 Insert](https://www.a-level-economics-tutor.com/content/files/2026/09/AQA-AS-Level-Economics-Paper-1-June-2025-Insert.pdf)

**Extract C (lines 14–15) states: ‘The UK House Price Index was 152.6 in August 2023, up 52.6% since January 2015.’** 

**Explain possible reasons why the price of houses has increased in recent years. (10 marks)**

Equilibrium is the price and quantity where demand meets supply in a market. A market is a place where buyers and sellers meet to exchange goods and services.

One possible reason why the price of houses might have increased is because of an increase in the population. Extract C line 15 mentions a growing population. Population is one of the non-price factors that can affect the demand curve. Demand is the number of goods and services that consumers are willing and able to buy at each given price, and this will increase as the population becomes larger. An increase in demand is shown in the diagram below, by the shift from D1 to D2\. This causes an expansion along the supply curve. The market equilibrium price increases from p1 to p2.

![](https://storage.ghost.io/c/c4/66/c466eade-2ad5-4613-8010-7a8ffa8c352f/content/images/2026/10/image.png)

Another possible reason for the increase in the price of houses might be an increase in costs of production, which is one of the factors that affect the supply curve. Extract C line 18 mentions the cost of land. Although land seems to be cheaper on floodplains, it is likely that land is becoming more expensive all around the UK due to its scarcity. The diagram shows the impact of a decrease in supply. There is a contraction along the demand curve and the equilibrium price increases from p1 to p2, which explains why houses have become more expensive.

![](https://storage.ghost.io/c/c4/66/c466eade-2ad5-4613-8010-7a8ffa8c352f/content/images/2026/10/image-1.png)

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