credit crunch crisis

8/8/2019 Credit Crunch Crisis

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CREDIT CRUNCH CRISIS AND ITS IMPLICATIONS ON THE UK BUY-TO-LET

MARKET


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AACCKKNNOOWWLLEEDDGGEEMMEENNTTSS

There are many people who have guided me during writing this dissertation and I have to

acknowledge the contribution of all of them.

First of all, I would offer my humble thanks to my supervisor ________ who consistently

provided insightful guidance and suggestions helping me tremendously to complete this

dissertation. I am really very grateful to him for his constructive comments and suggestions at

critical turning points in the progress of writing this dissertation.

My thanks go to all my professors and teachers at the university for their support.

Finally, I need to make special thanks to my family members for their motivation and support

that led me to where I am now.


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Dedication

I would like to dedicate this dissertation to my loving parents who have always believe in me

and supported me with unconditional love and devotion.


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Table of Contents

CHAPTER 1: INTRODUCTION ....................................................................................................... 6

Introduction to the Problem................................................................................................................ 6

What is unaffordable housing? ........................................................................................................... 7

Effects of unaffordable housing?........................................................................................................ 8

Existing affordable housing mechanisms............................................................................................ 9

Statement of the Problem ................................................................................................................. 12

Statement of the problem ............................................................................................................... 13

Purpose of the Study ........................................................................................................................ 15

Organization of the remaining chapters of the proposal ................ ............................... ................... 15

CHAPTER 2: LITERATURE REVIEW.......................................................................................... 16

Owner Cost of Housing .................................................................................................................... 16

HOME PRICE .................................................................................................................................... 18

Solutions for the house owners........................................................................................................ 18

Self-build .........................................................................................................................................20

Controlling the market .....................................................................................................................21

Conclusion .......................................................................................................................................24

Non-family collective living ..............................................................................................................24

Supplementary planning guidance ...................................................................................................26

Family home ................................................................................................................................26

Flat ..............................................................................................................................................26

House ..........................................................................................................................................27

House in Multiple Occupation (HMO)...........................................................................................27

Influence and pressure.................................................................................................................27

CHAPTER 3: METHODOLOGY .................................................................................................... 29

Research Design ..............................................................................................................................29

Sample ............................................................................................................................................2

9Measures .........................................................................................................................................30

Data Collection................................................................................................................................ 31

Data Analysis ...................................................................................................................................32

Validity and Reliability .....................................................................................................................32

CHAPTER 4: RESULTS................................................................................................................... 33


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Introduction..................................................................................................................................... 33

Discussion of Tester Treatment Variables ........................................................................................ 34

Preliminary Analysis of Differential Treatment .................................................................................36

Preliminary Analysis of Hypothesis One ...........................................................................................36

Preliminary Analysis of Hypothesis Two ...........................................................................................37

Preliminary Analysis of Hypothesis ...................................................................................................38

Logistic Regression Analysis .............................................................................................................38

Regression Analysis for Hypothesis One ...........................................................................................39

Regression Analysis for Hypothesis ..................................................................................................40

CHAPTER 5: DISCUSSION, IMPLICATIONS, RECOMMENDATIONS ...................................42

Introduction ....................................................................................................................................42

Section One: Discussion ...................................................................................................................42

Recommendations ........................................................................................................................... 43

REFERENCES .................................................................................................................................. 45

List of tables

Table 1: Eligibility Criteria for Advertising Sample ................................................................................30

Table 2: Categories of Treatment Questions ........................................................................................31Table 3: Frequency and Percent Distributions of Testers Gender, Race, Marital Status, Age, Child

Present, and Income ............................................................................................................................34


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CHAPTER 1: INTRODUCTION

Introduction to the Problem

In many respects, the question of affordable housing is not a new concern. Until the

second half of the twentieth century, the vast majority of ordinary people could not afford to

own their homes, and living in rented accommodation was the general social norm. Since the

1960s however, there has been a significant increase in owner occupation as the preferred

method of home ownership. Accordingly, the issue of housing being unaffordable has become a

more pressing concern, something that has been recognised by the government in its Green

Paper, published in July 2007, titledHomesfortheFuture:MoreSustainable,MoreAffordable

(Department for Communities and Local Government, 2007). Its effects are felt across Europe.

The expansion of the European Union has opened new markets for property investment, with

the result that central and southern European states are viewed as highly attractive locations for

property development. House price increases are also felt on a national level with high property

prices in the cities resulting in homebuyers and property developers alike branching into new

markets. In recent years, rural areas in particular have become popular with those able to

commute, or those seeking to avoid the urban sprawl. Prices in these locations have therefore

increased more sharply than in other parts of the country (Affordable Rural Housing

Commission,Report, 2005). However, in areas characterised by low incomes and seasonal

employment, (TheRoleoftheHousingSysteminRuralWales, 2005), those who have been

brought up there and wish to remain there are unable to afford these increases in prices, and

must therefore move out of the locality. The effects of this are significant--the population

dynamic is altered, local services are adversely affected, and in areas with a fragile linguistic

community, there is an impact on the culture of the area as well.


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The concerns surrounding affordable housing are manifested differently in different

areas. In the larger cities, particularly London and its environs, the primary concern is that key

workers (teachers, nurses, police officers, etc.) are no longer able to afford to live in the area

where they work (Office of the Deputy Prime Minister, 2005). In rural areas, the concern is that

high prices, the growth in the second home and holiday home market, and the seasonal nature

of local employment all mean that local people who have been brought up in the area are no

longer able to afford to live there. Rural areas therefore experience the in-migration of an older,

wealthier population, coupled with the out-migration of younger, poorer people, creating an

imbalance in the population dynamic, and fragmented communities, where people no longer

live in close proximity to their friends and family. The community support network is therefore

lost. Furthermore, with properties being sold as second homes and holiday homes, communities

are made up of a number of people who will not be living in the area on a permanent basis, thus

threatening the continued existence of local amenities (schools, shops, transport services, etc.).

What is unaffordable housing?

Unaffordable housing is a nebulous term. At its furthest extreme, housing is

unaffordable for those who are rendered homeless because they cannot afford the cost of

accommodation, or for those who require state support because of unemployment or inability to

work. Increasingly, however, accommodation is becoming increasingly unaffordable for

households containing one or more persons in regular full time employment (Bramley and

Karley 2005), and statistics published in 2006 indicated that a person earning 17,000 per

annum was not be able to afford to buy a home in 68 per cent of electoral wards in England

(Bramley and Karley 2005). In other words, the housing market is no longer affordable for

those who should have but few obstacles to prevent them from buying a home, and this is why


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affordable housing is such an important concern.

Effects of unaffordable housing?

The essence of housing unaffordability is fairly straightforward--at its heart is the fact

that the demand for homes significantly exceeds supply (Bramley and Karley 2005). As Hickey

and Best state:

As the demand for housing has continued to grow, the number of properties supplied

has fallen All that unmet demand results in greater competition for the houses that domake it to the market, higher property prices and higher profit for the developer.

(Hickey and Best, 2005).

The causes of unaffordable housing are well documented (Best and Schucksmith, 2006),

but include from the point of view of housing demand, the increase in lone households, the

increased availability and attractiveness of the buy-to-let market, and in rural areas, the

attraction of cheaper property prices and a move away from the urban lifestyle have all been

factors that have contributed to properties in these areas being in high demand both as primary

residences, and as retirement properties, second homes and holiday cottages. Consequently,

house prices in rural areas have increased far more sharply in recent years than house prices in

urban areas (Best and Schucksmith, 2006).

The other side of the coin is that the supply of affordable housing has also decreased,

making investment in property more attractive (Barker, 2004). The curtailment of the social

rented sector, and a shortage of appropriate housing stock have led to affordable homes being in

short supply, as have the effects of tighter planning controls restricting the supply of new

housing (Barker, 2004).

A further factor is the imbalance between income and spending power. The deregulation

of mortgages during the 1980s meant that buyers were able to borrow significantly higher sums


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of money from mortgage lenders, with the result that house prices rose. However, in rural areas

whereby employment is largely dependent on the tourism industry and is therefore likely to be

often low paid and seasonal workers often lack the employment security required in order to

apply for a mortgage, with the result that increased borrowing is less accessible, and increased

house prices are therefore less affordable.

Economies of scale also affect house prices. From the construction company's

perspective, it is advantageous to build one large property rather than two smaller homes.

Again, the consequence is that such houses are not affordable for first time buyers, and fail to

alleviate the demand for properties at the lower end of the housing market. While house prices

have increased across England and Wales, the impact is far more significant in rural areas. In

urban areas, where owner occupation is unachievable, the rental market is buoyant. In rural

areas, however, this alternative is not available as the private rented sector is very limited

(Barker, 2004). Combined together, all these factors have contributed to the current situation--

too many people wanting to buy too few homes. The result is that demand outstrips supply, and

houses become very expensive.

Existing affordable housing mechanisms

In England and Wales, affordable housing solutions have two key dimensions. On the

one hand there have been attempts to make housing affordable by limiting the impact of market

forces on certain types of accommodation. Secondly, effort have been made to make certain

types of housing available only to people defined as local, either because of their period of

residency in a locality, or because of their employment status within a locality. Both these

schemes operate broadly by separating affordable housing from the wider housing market. For

example, the Affordable Housing Commission report refers to affordable housing as being


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housing for those with an identifiable housing need (CashIncentiveScheme, 2006). Similarly,

efforts are made to maintain housing association stock. Restrictive covenants are used to

compel properties acquired under affordable housing schemes to be sold either to another

eligible occupier or sold back to the housing association, thus ensuring that the supply of

affordable properties does not decline (CashIncentiveScheme, 2006). The Welsh Assembly

Government has also accepted that owner occupation does not alleviate the problem of

unaffordable housing. Therefore, it proposes a combined approach--merging owner occupation

with rental. Accordingly, public housing stock will be available either for acquisition using the

HomeBuy,R

ight to Buy orR

ight to Acquire Schemes, or for rent (TheAffordableHousing

Toolkit, 2006),

Another means to provide affordable housing is by the use of Community Land Trusts.

The aim of such trusts is to prevent land from being acquired by property developers and that it

is purchased instead in order to provide affordable housing in particular communities. Land will

be owned on a long lease, and will therefore continue to be a source of affordable housing for

the community. This has been particularly valuable in Scotland in order to safeguard the future

of agricultural land for Scotland's crofting communities. Again, however, these schemes are

dependent on loans being made to the buyer in order to make up the shortfall between what is

affordable and the market price.

Linked to the issue of affordable housing is the question of local housing, particularly in

rural areas. A desire (and indeed an obligation, in the case of Areas of Outstanding Natural

Beauty and National to preserve the countryside means that the increased demand for housing

in these areas cannot be satisfied simply by increasing the supply of homes. Therefore, many

local authorities have sought to designate certain areas as rural exception sites where housing is


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provided at an affordable level for people who are either living in the area, working in the area,

providing services in the area, or people who used to live in the area and wish to return. One of

the leading examples of local housing initiatives is the Yorkshire Dales National Park

Authority, where proposals for new housing developments are only accepted if they aim to

fulfil the housing needs of those classed as local. House prices are controlled, and occupiers are

prevented from selling the properties to non-local people. This model has since been adopted in

other areas, including parts of Wales. In the Welsh context, this has the effect of protecting the

critical mass of Welsh-speakers by it facilitating house buying by local people (thus protecting

against the out-migration of Welsh-speakers) while limiting the purchasing of homes by those

from outside the locality (thus restricting the in-migration of non-Welsh speakers).

Statement of the Problem

Karen Cooksley, a solicitor with Bevan Britton explains:

What the government is trying to do is deliver a large quantity of private andaffordable housing very quickly, particularly in London and the South East, and at the

same time drive up quality. But there is a tension between those two. If you're sayingyou want more housing, more densely provided on brown field sites, more quickly, but

the houses must also be beautiful--and, by the way, cheap--then you will find thosedrivers pulling in different directions (Cited in Langdon Down, 2005)

However, the biggest flaw in the concept of affordable housing is that it is kept separate

from market housing, and yet defined with reference to market housing. Under the Homebuy

scheme, housing is made affordable by the fact that the housing association pays a proportion

(usually 25 per cent) of the purchase cost. Therefore, as house prices increase, so too does the

proportion payable by the buyer. Accordingly, house prices lowered so as to be affordable very

quickly become unaffordable as house prices increase more rapidly than average incomes.


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A further difficulty caused by defining affordable housing with reference to market

prices is that because of the obligation to repay the loan made by the housing association, the

buyer cannot sell his home for the full market value. While acquiring affordable housing is

straightforward, leaving affordable housing is therefore more difficult. The buyer cannot realise

the full market price of the house, and cannot therefore buy a house on the open market. He or

she must therefore remain in the affordable housing sector, thus denying another person the

opportunity to acquire an affordable house. On the other hand, without being able to recover its

loan, the housing association cannot use that money to provide a HomeBuy loan for the second

generation of homebuyers. Consequently, the existing affordable housing schemes are therefore

little more than a short-term solution that enables a first cohort of potential homebuyers to

acquire a home, but does not create a sustainable affordable housing system.

There are also insufficient incentives for landowners to apply land for affordable

housing schemes. Because the developer is seeking to offset the cost of providing affordable

housing, for example by buying the land at a reduced price, the landowner is in the situation

where he may gain a better price by refusing to sell the land for affordable housing, and only

agreeing to sell it for market housing. Similarly, where land is leased for the purposes of

providing affordable housing, rather than sold, a number of disincentives are again encountered,

as the landowner is likely to be obliged to bay either capital gains tax or inheritance tax on the

reversion. Therefore, there are insufficient incentives both for the landowner and the developer

to apply land for affordable housing purposes (Satsangi and Dunmore, 2003).

Statement of the problem

The recent credit crunch in the buy-to-let market has exposed many flaws in terms of

macroeconomic policies and strategies. The researchers main concern in this study is to


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examine the different dimensions of the buy-to-let market in detail in the context of the recent

credit crunch in the UK.

Owning its residence (i.e. investing in housing asset) yields cash flows and these cash

flows and opportunity costs matter in decision of owning its house. Cash flows relevant to

owning a house are partly periodic (annual) flows and partly occasional flows which incurred at

the beginning or end of the housing tenure. The periodic cash flows are usually referred to as

user costs and which include mortgage payment, maintaining cost, and tax deduction. The

opportunity costs are mainly from holding home equity and renting.

A general formula for the net periodic user cost of homeowner at tis:

Equation 1

In equation (1), is net periodic user cost of homeowner, rmis the mortgage interest

rate, Mtis the mortgage outstanding balance, tis marginal income tax rate of homeowners, and

r tis the real estate tax rate. utis the proportional maintaining cost including depreciation, ptis

a unit price of house, b is expected appreciation rate of price of house, and htis size of the

house. The first term is interest payment of mortgage outstanding balance and real estate tax

payment after deducting from income tax. The second term is maintaining cost of owner

occupied house and Mis a principal change on mortgage (Since Mis non positive,Mis

non negative.). The last term means expected capital gain from housing tenure. Equation (1)

reflects the special tax status of homeowners. Since interest payment and real estate taxes are

deductible, the household who faces higher marginal income tax rate has more incentive to own

its house and the homeowners also have incentive to keep high mortgage principal.


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The occasional cash flows such as transaction and moving costs should be considered in

this cash flows and these occasional cost are depending on current housing tenure. The current

renters need to take account moving costs and transaction costs for purchasing a house in

addition to net periodic costs of home owner. Transaction cost for renters include a mortgage

initiate fees. To current homeowners, moving costs and transaction costs will apply to the

opportunity cost for renting. Transaction costs for homeowners include the cost for clearing

mortgage balances and time cost for selling the house as well.

Purpose of the Study

The purpose of this study is to examine the impact of the recent credit crunch especially

in the mortgage market and its implications on the buy-to-let market in the UK. For this

purpose, this study has taken two approaches. First, the researcher will examine the mortgage

market trends from a theoretical perspective. Second, the researcher will analyze the impact of

credit crunch on the buy-to-let market statistically.

Organization of the remaining chapters of the proposal

1. Chapter 2 will identify the previous researches surrounding the credit crunch and themortgage market after which this chapter will outline specific areas of the research

related to this study.

2. Chapter 3 will offer hypotheses, the research design and the sampling method.3. Chapter 4 will offer results of chapter 3.4. Chapter 5 will offer discussion of results from chapter 4.


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CHAPTER 2: LITERATURE REVIEW

Owner Cost of Housing

Owning its residence (i.e. investing in housing asset) yields cash flows and these cash

flows and opportunity costs matter in decision of owning its house. Cash flows relevant to

owning a house are partly periodic (annual) flows and partly occasional flows which incurred at

the beginning or end of the housing tenure. The periodic cash flows are usually referred to as

user costs and which include mortgage payment, maintaining cost, and tax deduction. The

opportunity costs are mainly from holding home equity and renting.

A general formula for the net periodic user cost of homeowner at t is

Equation 2

In equation (1), is net periodic user cost of homeowner, rm is the mortgage interest

rate, Mt is the mortgage outstanding balance, tis marginal income tax rate of homeowners, and

tris the real estate tax rate. ut is the proportional maintaining cost including depreciation, pt is a

unit price of house, b is expected appreciation rate of price of house, and ht is size of the house.

The first term is interest payment of mortgage outstanding balance and real estate tax payment

after deducting from income tax. The second term is maintaining cost of owner occupied house

and Mt is a principal change on mortgage (Since Mt is non positive, -Mt is non negative.).

The last term means expected capital gain from housing tenure. Equation (1) reflects the special

tax status of homeowners. Since interest payment and real estate taxes are deductible, the

household who faces higher marginal income tax rate has more incentive to own its house and

the homeowners also have incentive to keep high mortgage principal. The opportunity costs for


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home owners are costs for renters since only alternative choice of owning a house is renting. A

general formula for the opportunity cost is:

Equation 3

Crt stands for opportunity cash flow for the homeowner. at is a proportional rental rate

on house value and the size of rental house may not be the same as the size of owner-occupied

house. (ptht -Mt) is net home equity of the homeowner. is therefore, expected return

from alternative investments. The expected return can be a risk free interest rate, a market

portfolio return or any other return in financial market depending on homeowners portfolio.

Also, it can be calculated as a utility loss from distorting consumption when borrowing from

market is constrained. Especially for the young household who does not have enough labor

income or financial assets, the utility loss from depressing other consumption will be major

opportunity cost for owning a house.

The occasional cash flows such as transaction and moving costs should be considered in

this cash flows and these occasional cost are depending on current housing tenure. The current

renters need to take account moving costs and transaction costs for purchasing a house in

addition to net periodic costs of home owner. Transaction cost for renters include a mortgage

initiate fees. To current homeowners, moving costs and transaction costs will apply to the

opportunity cost for renting. Transaction costs for homeowners include the cost for clearing

mortgage balances and time cost for selling the house as well.

The equation (2) and (3) suggest the factors which affect to the costs of owning a house

such as expected housing return, rental cost, interest rate, stock market return, and marginal

income tax rate. Those factors can be classified into economic factors and demographic factors.

The economic factors are common for all household in that economy such as unit price of


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house, mortgage interest rate, maintaining cost, and proportional rent rate at t. These factors can

be calculated from aggregate level. The demographic factors are applied variously to each

cohort of household such as demand for housing size. These factors are strongly related

households income and age and it cannot be explained in aggregate level. Affordability of

home must be more important to the young household who has relative less income and expects

increasing income with long horizon of life rather than to retired household. Also demand of

housing service- demands of house size- is considered compliment with other consumptions.

Government policies and financial innovations are important factors to increase

homeownership as well.

The government has long had a policy of promoting homeownership including tax code

which skewed to favor homeowners. Financial innovation also has contributed to the ability of

younger households to buy homes with little down payment. This section is exploring how

these factors can explain the recent changes in homeownership rate.

HOME PRICE

The first economic factor I consider is unit price of house. The higher appreciation rate

of home price can lead the higher cost of dwelling for both renters (if proportional rental rate is

constant) and owners rent cost and maintaining cost increase. However, the higher

appreciation rate of home price means the higher return from the housing investments so that

the user cost of homeowner decreases. To the homeowners who have relatively net home equity

level, higher appreciation rate of home price forces them to adjust their home equity to reduce

opportunity cost from investment in other asset.

Solutions for the house owners

One effective solution considering the recent credit crunch is to make greater use of


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leaseholds and leasehold enfranchisement. Although home ownership is seen as the goal in

terms of home acquisition, it may be that such an approach is too restrictive. Accordingly,

increasingly unaffordable house prices may mean that the time is ripe to reconsider whether a

means of home acquisition. Certainly, this method of home acquisition has been prevalent in

mainland Europe long after home acquisition became the norm in England and Wales.

Furthermore, it has become increasingly popular in the context of commercial property, where

the arrangement has perceived advantages for both the leaseholder and the owner of the

reversion. Such an approach could be used more extensively in the residential context, with a

long lease likely to be cheaper than buying the freehold. In the context of affordable housing for

local people, the system of leasehold enfranchisement may be a useful way of overcoming the

difficulties encountered by those who wish to climb onto the first rung of the property ladder. In

essence, leasehold enfranchisement gives leaseholders a right to buy the leasehold property

when the lease expires.2

A variation on this model is proposed by Hickey and Best (2005). The landlord, a lets a

house to a prospective homebuyer, who pays rent to the landlord. Meanwhile the landlord is

involved in building affordable housing developments. When the affordable housing

development is complete, the tenant purchases a property on this development. However,

during his period as a public sector tenant, the buyer acquires a stake in the equity of the rental

property, which he is allowed to transfer to the purchase of the affordable housing development

property. Hickey and Best argue that this has potential benefits for both the landlord and the

tenant. The landlord is able to avoid capital gains tax on the increase in the value of the land he

has used for development. Furthermore, he has a guaranteed buyer for one of the houses on the

2As provided by the Leasehold Reform Act 1967 (1967, c.88), the Landlord and Tenant Act 1987 (1987, c.31), the Leasehold

Reform and Urban Development Act 1993 (1993, c.28) and the Commonhold and Leasehold Reform Act 2002 (2002, c.15).


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development, and a consequent avoidance of estate agents' fees. From the tenant's perspective,

he has the advantage of being able to treat rent payments as a contribution towards the equity of

his future home, and consequently acquires a larger share of his new home than would

ordinarily be the case.

For landlords, however, there is very little incentive to this system--the main advantage

of the lease for the landlord is, after all, the interest he has in the reversion, which will enable

him to grant a new lease or to take possession of the property. Similarly, Hickey and Best's

variation on this scheme may operate well where the supply of properties outstrips demand.

However, as is currently the case, and one of the key reasons for house prices being

unaffordable, there are few incentives to such a scheme where the demand for properties

outstrips supply. From the landlord's point of view, he is in a financially stronger position if

rental payments are merely that, and do not represent a contribution to the acquisition of land,

and if he is able to sell the developed land on the open market. Accordingly, where the market

favours the seller, the scheme proposed by Hickey and Best provides very little incentive for

the landlord to participate.

Self-build

Another solution put forward by Hickey and Best (2005) is to encourage homebuyers to

undertake self-build projects. Hickey and Best propose two variations on this method, namely

self-build to own (whereby the homebuyer builds his own home), and self-build to rent (where

the homebuyer builds his own home, but pays rent to a public sector body such as a housing

association). However, it is clear that while such schemes may appear to be cost effective on a

small scale, this may not be as valid a proposal on a larger scale. The individual homebuyer

may lack the expertise to design and build his own home, especially where it is also necessary


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to maximise energy efficiency, and cannot take advantage of the economies of scale available

to the property developer. Furthermore, even though land sold for self-build projects is sold at a

considerably cheaper cost than developed land, this does not mean that it is affordable without a

dual income. This being the case, the self-build project will take significantly longer to

complete than property being developed by a development company, simply because the

homebuyer must continue with his ordinary employment alongside the self-build project.

During this period, the homebuyer is likely to have to make repayments on a mortgage loan

used to acquire the self-build land, and also to make rent payments to a landlord until the

project is completed. Widespread use of the self-build method will also require strict planning

regulation--as those embarking on self-build projects are less likely to wish to build their homes

in the levels of density and uniformity encountered in larger-scale developments. Accordingly,

while this solution may be appropriate in individual cases, it is unlikely to resolve the more

general issue of demand outstripping supply, and is unlikely to be a feasible or suitable solution

for the vast majority of first time buyers.

Controlling the market

Therefore, while the solutions that have been proposed thus far have considerable merit,

and may be appropriate in certain situations, their weaknesses mean that they do not offer a

large-scale solution to the problem--the main flaw being the fact that affordable housing and

local housing are both defined with reference to the housing market, but are kept separate from

it. This is something that is set to continue, if the government's latest proposals to expand

shared equity schemes, while simultaneously allowing further borrowing, become law.

Accordingly, it may be appropriate to consider that more drastic action needs to be taken--

namely for the state to exercise stricter control over the housing market. Although this is a


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solution is one that will require the government to make decisions that may be unpopular with

landowners and existing homeowners, it does provide a means of ensuring that housing remains

affordable. One way in which the housing market may be used to ensure affordable housing is

as follows. First, it is necessary to identify what is affordable for different groups of people. In

order to do this, it is necessary to survey the income of different types of household groupings.

Some households may have low levels of income, for example where a household consists of a

single person living alone, or where a household consists of one wage earner and dependants.

Similarly, some households may find housing to be unaffordable because of a dual, but low-

waged income. Other households may define affordability at a slightly higher level, by virtue of

having either two well-paid earners, or one well-paid single income supplemented by a second

lower income. Accordingly, by surveying the different types of household, it would be possible

to band different groups together based on household income. This is something that we already

encounter with housing needs analysis in the social rented sector, but in order to be meaningful,

this needs to occur on a much broader scale. Having identified different levels of affordability,

it would then be possible to identify what level of affordability is appropriate for different

household groups, and to calculate what is affordable for different bands of income.

The second step is to identify the type of housing that each different household group

requires. For example, the housing needs of a young single person are likely to be very different

from the housing needs of a young family, or the housing needs of an elderly couple.

Accordingly, it is necessary to identify the type of housing that would be appropriate for

different households and different levels of affordability. Factors such as the type of dwelling,

the number of bedrooms, the number of storeys, will all be relevant in determining what is

appropriate. While new properties on affordable housing developments are currently being


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identified in this way, it should also be possible to apply the same or similar criteria to existing

housing stock. In this way it would be possible to categorise properties within an area as being

within different bands of affordability, from the smaller home suitable for a single person or a

couple, to a larger property better suited for a family, to the premium properties categorised

because of their extensive size or uniqueness of location or features.

In this way it would be then possible to set housing price bands for different types of

property based on what is affordable for different household groups. A further dimension is that

affordability needs to be defined according to locality (Costello and Watkins, 2002). The

definition of housing as affordable for a particular group should be developed with reference to

local affordability indicators, having regard to local wages and local household patterns. Not

only will housing therefore be affordable on the open market, this will also ensure that people

are not priced out of the local housing market by external factors pushing house prices up

(Costello and Watkins, 2002). Defining affordability at a local level must then be supplemented

by requirements that give housing priority to those who meet local occupancy criteria--which

are likely to be broadly similar to those encountered under the existing schemes. This would

have the effect of preventing a property from being bought by those from outside the area who

are able to command a higher price because they earn a higher average wage. As with the

existing rural affordability schemes, this wider market could be restricted to those in

neighbouring areas initially, and then widened further if no prospective buyers emerge. Further

controls may be applied, such as extending the local occupancy requirement to include a larger

proportion of property sales, and imposing tighter restrictions in order to ensure that new

developments of housing estates focus on building a larger number of smaller homes suitable

for the first time buyer, rather than four and five bedroom developments catering for the


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premium market. A combination of these methods would ensure that housing remains

affordable and locally focused, but would also ensure that new housing developments improve

the supply of housing at the lower levels of affordability, rather than the highest levels of

affordability.

Conclusion

In essence, the cost of house prices is increasing more quickly than can be offset by

affordable housing, and the existing mechanisms merely offer short-term solutions which do

not preserve housing at an affordable level in the longer term. Neither do they enable people to

remain in rural communities. More drastic measures are therefore needed in order to maintain

affordability and local accessibility. Market-led affordable housing would ensure that house

prices are affordable on a more general level than is currently the case. Controlling the housing

market would also ensure that the effects of population shifts do not alter the population

dynamic, and in the Welsh context, the linguistic dynamic of the community. Such a change in

the law would also bring about other benefits. First, it would ensure that communities are

sustainable. Homes would be occupied by those living in the community and participating in

the community, rather than by commuters or those who purchase property as holiday homes or

second homes, thus ensuring that a network of community support is sustained. Also, it ensures

that people are better able to live close to where they work--something that is likely to bring

significant environmental benefits. Its key advantage however is to create a sustainable pattern

of affordability, which ensures that housing affordability is maintained, communities are

maintained, and in Wales, a minority language is maintained.

Non-family collective living

A lot of people, particularly young people, live together not as a family but sharing


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facilities, such as bathroom, toilet, kitchen, sitting room. This is a household, a single

household, and although the building requires planning permission, the creation of the

household, whether by new build or conversion, does not require planning permission if six or

fewer persons are involved as it qualifies as a dwelling house class C3(b). This represents a

huge gap in planning control and requires simple amendment of the use classes order. Such a

household is not in planning law strictly a house in multiple occupation (HMO); an HMO is

anything not within the definition of a dwelling house, though it is regularly described in

society as an HMO. Paradoxically for the purposes of housing law an HMO is where there is no

family (defined in s.258), irrespective of the numbers of residents. A simple statutory definition

of HMO for all purposes would greatly assist,7

though would involve extra work for the

planning officers. In Northern Ireland planning permission is required where three or more

people living together come from different families.

Concern has been expressed recently at the substantial growth in the number of small

so-called bail hostels, some 150 or so to begin with, catering among others for prisoners on

early release, some of whom are under home detention curfew (HDC) and tagged.

Commissioned by the Ministry of Justice, as these hostels contain not more than six persons

they do not require planning permission. Sex, child, violence and race offenders are supposed to

be excluded, though a released prisoner, Anthony Rice, murdered a victim while on early

release.

The local planning authority will sometimes place a condition upon planning permission

for a group or estate of houses, family houses, that they be retained for family use and not

converted to non-family use. The reasonableness or indeed the validity of such a condition may

be open to challenge where it seeks to restrict conversion to a non-family use, i.e. household not


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exceeding six, still a dwelling house, which does not require planning permission anyway,

unless some cogent reason can be found to justify the condition. A non-dwelling house use

would involve a change of use and require planning permission anyway.

Supplementary planning guidance

One approach is by way of supplementary guidance, and Southampton City Council has

produced a draft document Supplementary planning document: Family homes , February

2008, seeking to promote family housing. This is based upon a housing mix and a type of

policy in the core strategy, which has yet to be examined, which seeks to secure a balance of

housing types and more sustainable and balanced communities through the provision of at least

30 per cent family homes on sites of more than 10 dwellings or which exceed 0.5 hectares. In

this supplementary planning document an attempt is made to offer definitions, and the

suggested essence of a family home is the number of bedrooms and a private amenity space or

garden.

Family home

A family home has the following characteristics:

Two or more bedrooms.

Direct access to a useable area of private amenity space or garden for the sole use of

the household of at least 20 sq m in area.

Flat

A flat means a separate and self-contained set of premises constructed or adapted for

use for the purpose of a dwelling and forming part of a building from some other part of which

it is divided horizontally (see General Permitted Development Order Article 1). This type of

dwelling can be on two or more floors e.g. a maisonette.


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House

A house for the purposes of this document includes a bungalow or town house and will

normally have its own garden or amenity area but excludes a flat, maisonette or a building

containing separate flats or maisonettes.

House in Multiple Occupation (HMO)

For the purposes of this document and the interpretation of the Core Strategy this refers

to a house or flat where the residents share one or more basic amenities such as toilet,

bathroom/shower room or cooking facilities but do not live together as a single household. It

does not include a house divided into self-contained flats and does not include hostels.

Influence and pressure

The need for Government to amend the use classes order so as to encompass all non-

family occupation has become overwhelming. The Minister for Housing and Planning has in

April 2008 at least announced a review of the management of HMOs.

The local plan might indicate family housing zones or areas of restraint with a threshold

beyond which certain forms of development would threaten existing family housing or the

existing character or balance of a neighbourhood, but such type-specific allocation would seem

to conflict with the principle behind the local development framework spatial concept; and an

attempt by Leeds City Council to impose an area of special restraint on studentification failed

on appeal.

In addition to a family housing policy in supplementary guidance, founded upon a

housing mix policy in the core strategy, the local authority may be able to bring other influence

and pressure to bear, subject always to the proper proprieties. A local understanding with

local developers may smooth relationships; applications for planning permission involving


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family housing may be dealt with favourably and expeditiously; the percentage of affordable

housing requirement may be reduced; where the local authority is the landowner and is

retaining the freehold or selling the land appropriate covenants may be imposed in the transfer,

always provided that the retained land is capable of benefiting from such a covenant. Local

universities and colleges and similar institutions may be persuaded and assisted to provide in-

house halls of residence for their students so as to relieve the pressure on the local housing

market.


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CHAPTER 3: METHODOLOGY

This research will attempt to determine if there is a relationship between the recent

credit crunch and the buy-to-let market price variations. As stated in the introduction of this

study, the main purpose of the author was to examine the impact of the recent credit crunch

especially in the mortgage market and its implications on the buy-to-let market in the UK. For

this purpose, this study has taken two approaches. First, the researcher examines the mortgage

market trends from a theoretical perspective. Second, the researcher analyzes the impact of

credit crunch on the buy-to-let market statistically.

Research Design

The research is a secondary analysis of data collected from different reports, website

statistics and the research articles on buy-to-let market and the economic recession in the UK.

The data were generated utilizing a specialized technique developed primarily to document

discrimination in lending and housing. The technique is called paired testing (HUD, 2006).

Sample

The sample design was an integrated, clustered, two-stage probability sample design

(HUD, 2006). The first stage consisted of a list of all Metropolitan Statistical Areas, which was

stratified based on size, and proportion of the populations. Different sites pertaining to the data

on buy-to-let market such as FT, BBC, etc as well as Links like:

http://www.shieldsgazette.com/news/Buytolet-landlords-could-beat-credit.4950321.jp and

http://www.telegraph.co.uk/news/uknews/2819863/Credit-crunch-rocks-buy-to-let-lender-

Paragon.html were selected for the data of this study.


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It is also possible to refine the adverse treatment measure to produce a net treatment measure.

Using the HUD2000 dataset, the net treatment measure will be found by using the following

formula: incidence of minority-favored treatment minus the incidence of White-favored

treatment. This generally produces a much smaller adverse treatment score.

Finally, the treatment questions can be combined to form a composite treatment score. The

questions can be combined to create a composite measure of each category of treatment or for

the transaction as a whole. The most important independent variable is the testers race.

Nevertheless, a large number of additional variables were measured in the following categories:

site variable, timing variable, tester characteristics, real estate agent and agency characteristics,

and neighborhood characteristics.

Data Collection

Data were collected using paired testers. Each pair of testers was given similar fictitious

backgrounds. Below is a partial list of some of the characteristics that were scripted for the

testers.

1. Minimum number of bedrooms acceptable for the household;2. Geographic preference;3. Income;4. Debt to Income;5. Credit Score; and

Table 2: Categories of Treatment Questions

Sales Issue Number of Questions

Sales Availability 3

Sales Inspection 3


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Geographic Steering 2

Financing Assistance 3

Sales Encouragement 3

Sales Overall Treatment 14

Data Analysis

The data was analyzed using SPSS. Treatment variables were analyzed by landlords and the

buyers. The possible outcomes indicated the proportion of paired tests that favor acquisition of

house by the tenants. When appropriate, the outcome differences was compared to those which

simply compare racial groups. Appropriate tests of significance will be employed to determine

if the treatment outcome differences are significant. The significance level will be .05. The data

were collected from major metropolitan areas. Finally, appropriate regression models (logit)

was estimated to determine if other factors may have contributed to the outcome differences.

Validity and Reliability

Since reliability is an estimate that similar results should be obtained under the same

conditions, it would be reasonable to assume this would be the case using the secondary data.

The validity is the degree that we measured what we said we would measure. In this study, we

specifically targeted tenants with regard to treatment variables in the home buying process.


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CHAPTER 4: RESULTS

Introduction

This chapter will include the analysis of the data. It will describe the sample and test the

hypotheses. There were several neighborhood characteristics for the advertised unit, which

were included in the original research, but not available in the dataset. Those characteristics

were median house value, per capita income, poverty rate, percentage of the population that

was Black, percentage of the population that were Hispanic, and the percentage of housing units

that were owner occupied. Therefore, these neighborhood characteristics will not be included in

the analysis.

The proceeding section will describe the sample used in the data analysis. The variables

employed in the analysis are those used in the original research conducted by Margery Austin

Turner, Stephen L. Ross, George C. Galster, and John Yinger (2002). In addition, these

variables have been used in other research efforts on gender discrimination. According to

Roscigno, there is a possibility that gender and race has an impact on housing discrimination

(2007). In an article by Hansen, Worst of Both Worlds, focus group participants (attorneys)

noted the combination of being a racial and a gender minority had a devastating effect on both

their personal and professional lives (2006). Hansen (2006) notes diversity programs have not

reversed employment patterns. Wilson (2006) suggested age discrimination overshadowed race

and gender discrimination. Summary of Demographic Data of the Sample.

Table 3 shows the frequency and percent distributions for the gender, race, marital status, age,

and income. Relative to gender, there 55.6% of the testers were female.


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In terms of race, 64.4% of the testers were White. In the original sample, there were exactly the

same numbers of minority testers as White testers. Because this research will only test for

Black and White differences, the other minorities were excluded. Therefore, there are more

White testers than Black testers.

In terms of tester marital status, 94.2%, of the testers were married. Tester ages ranged from 18

to 73. Sixty-five percent of the testers were between the ages of 26 and 45. The final category

of this table is income of the tester. There are two modal categories, 44,200 69,201 at 27.2%

and 69,202 94,202 22.0%.

Table 3: Frequency and Percent Distributions of Testers Gender, Race, Marital Status, Age, Child Present, and Income

Variable Percent Cumulative percent

Gender

Male 55.6 56.0Male 43.7 100.0

Race

White 64.4 64.4Black 35.6 100.0

Marital StatusMarried 94.2 94.2 Not Married 5.8 100.0

Age

18 25 8.0 8.026 35 39.0 47.0

36 45 26.3 73.346 55 19.9 93.2

56+ 6.8 100.0

Discussion of Tester Treatment Variables


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In the original research conducted by Turner, Ross, Galster, and Yinger (2002), they

divided the treatment variables into several hierarchical categories. One category was sales

availability. It included:

1. Advertised Unit Available,

2. Similar Units Available, and

3. Number of Units Recommended.

Sales inspection was category two, which included:

1. Advertised Unit Inspected,

2. Similar Units Inspected, and

3. Number of Units Inspected.

Geographic Steering was category three, which included:

1. Homes Recommended, and

2. Homes Inspected. .

Financing Assistance was the fourth category, which included: :

1. Help with Financing Offered,

2. Lenders Recommended, and

3. Down Payment Discussed. .

Sales Encouragement is category five, which includes: :

1. Follow-up Contact from Real Estate Agent,

2. Agent Told Tester of Qualification to Buy, and


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3. Agent Arranged for Future Contact.

Treatment variables used are: Advertised Unit was Available, Inspected the Advertised

Unit, Similar Unit, Available, Qualified to Buy, Agent Offered Financing Help, Agent

Suggested Lender, Agent Suggested Down Payment, Arrangements for Future Contact. In

83.3% of the cases, testers were told the advertised unit was available. In only 16.7% of the

cases, the tester told the advertised unit was not available. In 25.8% of the cases, testers were

told the advertised unit was not available for inspection. In 71.2% of the cases, the tester was

told that a similar unit was available. In 28.8% of the cases, testers were told a similar unit was

not available. In 98.3% of the cases, testers were told if they qualified to purchase a home. In

1.7% of the cases, the tester was told they did not qualify to purchase a home. In 57.7% of the

cases, real estate agents offered to help find financing while in 42.3% of the cases real estate

agents did not offer help with finding financing. In 53.2% of the cases, real estate agents

offered suggestions of potential lenders, while in 46.8% of the cases real estate agents did not

suggest lenders. In 35.2% of the cases, agents suggested a down payment amount, while in

64.8% of the cases the agent did not suggest a down payment requirement.

Preliminary Analysis of Differential Treatment

The goal of this research is to examine the impact of credit crunch on the buy to let market in

the UK.

Preliminary Analysis of Hypothesis OneHypothesis two states that White female testers will receive less favorable treatment

than White male testers. Hypothesis two predicts that White females will be treated less

favorably than White males. Table 6 displays cross tabulations of the treatment variables by

gender for White testers only. This preliminary analysis will not employ a test statistic per se. It


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will simply compare percentages by gender and will use the long standing convention that a

difference by 10 percentage points or more is significant.

The table shows that for six of seven treatment variables White females and White

males were treated about the same. There was no instance in this analysis where White females

received less favorable treatment than White males. For the treatment variable, Recommended

Lenders, 59.8% of the White females were told of possible lenders compared to 49.5% for

White males. There is differential treatment by gender by least ten percentage points. However,

White females were treated more favorably than White males.

This preliminary analysis provides no support for hypothesis two, that White females would be

less favorably treated than White males. For one treatment variable, females were treated more

favorably than males hypothesis two was not supported in the preliminary analysis.

Preliminary Analysis of Hypothesis Two

Hypothesis three states that Black female testers will receive less favorable treatment

than Black male testers. Hypothesis three predicts that Black females will be treated less

favorably than Black males. Table 7 displays cross tabulations of the treatment variables by

gender for Black testers only. This preliminary analysis will not employ a test statistic per se. It

will simply compare percentages by gender and will use the long standing convention that a

difference by 10 percentage points or more is significant. The variable Offered Financial Help

comes close to being significant. In this instance, Black females (62.5%) were told of possible

financial assistance. This is 9.3% percentage points more than males (53.2%). However, also,

Black females were treated more favorably than Black males. This preliminary analysis

provides no support for hypothesis three, that Black females would be less favorably treated


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than Black males. In fact, for two treatment variables, Black females were treated more

favorably than Black males Hypothesis three was not supported.

Preliminary Analysis of Hypothesis

As in the previous preliminary analysis, this analysis will not employ a test statistic per

se. It will simply compare percentages by race for gender. It will use the long standing

convention that a difference by 10 percentage points or more is significant. As in the

preliminary analysis for gender, there were few differences by race for six of the seven

treatment variables. The one treatment variable where there was a difference by race was

Inspected Advertised Unit, where 77% of the White females were told the advertised unit could

be inspected. On the other hand, only 67.1% of the Black females were told the Advertised Unit

could be inspected. This is a difference of 9.9 percentage points. In this one instance hypothesis

four was supported.

There is little support in this preliminary analysis for hypothesis four. Hypothesis four

had an expectation that Black females would be treated less favorably than White females. In

only one instance, Inspected Advertised Unit was there any difference in the treatment of White

and Black females. In this instance, White females received favorable treatment compared to

Black females as hypothesized. Hypothesis four was supported in only one of the seven

treatment variables.

Logistic Regression Analysis

The results of the preliminary analyses of the hypotheses provided little support for the

hypotheses. However, the preliminary analyses only included two independent variables;

gender and race. The proceeding analyses will test the hypotheses and will include up to six


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independent variables. The hypotheses will be tested using Logistic The Logistic Regression

procedure allows one to perform regression analyses using nominal-level dependent variables.

Furthermore, it allows one to use multiple independent variables. Finally, it provides tests of

significance for each independent variable used. The level of significance used in the

proceeding analyses is .05. Logistic regression is a regression procedure for nominal-level

dependent variables. The dependent variables are the seven treatment variables. The dependent

variables are: (a) Advertised Unit Available, (b) Inspected Advertised Unit, (c) Similar Unit

was Available, (d) Qualified to Buy, (e) Agent Offered Financial Help, (f) Agent

R

ecommended Lenders, and (g) Down Payment Discussed. The response categories for each

dependent variable were either one for yes or two for no. Both the independent and dependent

variables were also used in the study in 2002 by Turner, Ross, Galster, and Yinger. There will

be a separate logistic regression performed for each treatment variable. The independent

variables are (a) tester gender, (b) tester race, (c) tester martial status, (d) tester age, (e) child

present, (f) tester age, and (g) tester income.

Regression Analysis for Hypothesis One

Hypothesis 1: Female testers will experience less favorable treatment than male testers.

It shows that four of the seven independent variables were significant in accounting for

treatment. They were race, age, gender, and income. However, none of these independent

variables were significant for all of the treatment variables. The independent variables were

significant for five of the seven treatment variables. Race is significant for two of the seven

treatment variables. One of the treatment variables is in the beginning of the home buying

process (Inspected Advertised Unit) and the second treatment variable is at the end of the home


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buying process (Down Payment Discussed). Tester age was significant for Financial Help

Offered, Lenders

Recommended and Down Payment Discussed. Tester gender was significant for Similar

Unit Available while Income was significant for Lenders Recommended. Hypothesis one

asserts that gender is likely to be statistically significant for the entire home buying process; i.e.

for all or most of the treatment variables. It should be noted that Tester Gender is significant for

only one of the seven treatment variables (Similar Unit Available).

The regression analysis produced similar results as the preliminary analysis. In both

analyses, there was only one instance of significant differential treatment by gender. Therefore,

the regression analysis for Hypothesis One confirms the preliminary analysis of little to no

support for the hypothesis. That is, there was little to no difference in the treatment of male and

female testers. Similar to the finding in the preliminary analysis, this regression analysis for

Hypothesis Two provides no support for the second hypothesis. In the preliminary analysis,

Suggested Lenders did show a difference in treatment by gender. But the difference favored the

females. Therefore hypothesis two was not supported since White females did receive more

favorable treatment than White males.

Regression Analysis for Hypothesis

With regard to Gender, the regressions performed to test Hypothesis Three provided

absolutely no support for that hypothesis. That is to say that there is no difference in treatment

between Black female and Black male Testers. The regression analysis is similar to the

preliminary analysis for Hypothesis Three. The preliminary analysis showed that for five of the

seven treatment variables, both Black females and Black males were treated about the same.

But for the treatment variables of Suggested Lenders and Offered Financial Help, Black


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females were treated more favorably than Black males. In summary, there were four hypotheses

tested. For hypotheses one and three, there was little or no support. For the hypotheses two and

four, there was moderate support. When the regressions were performed for Black testers, the

patterns were quite different than for White testers. The public use data sets for the research in

this study are free. The data sets are in AS format and can be found online.


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CHAPTER 5: DISCUSSION, IMPLICATIONS, RECOMMENDATIONS

Introduction

This chapter has been divided into three sections. Section one discusses the results of

this investigation. Section two describes the implications, while section three provides

recommendations.

Section One: Discussion

As we all know, in many parts of the country, especially in south-east England, there is

a serious housing shortage, despite the current fall in prices. There are many reasons for this

pressure. The population is increasing, immigration playing a significant part. People are living

longer. More people live alone, in single households, than in earlier times. A lot of housing is

old and in poor repair and gradually being lost. Many houses are being converted into houses in

multiple occupation, HMOs. The big rise in the numbers of students, especially in the

university cities and towns, has led to studentification in many areas. Building land is in short

supply, and very expensive. In the building industry labour and materials are expensive, and

productivity is not particularly good. The requirements of the planning system and local plans

and emerging local development frameworks are often seen by developers as unduly and

unnecessarily restrictive.

In many towns and cities new residential development is mostly in the form of flats not

houses, often 80 to 90 per cent. The developers can get more units on to the site, and more

easily meet the required affordable homes element, and make the development economically

more viable or profitable. The demand is there in the market. Buy-to-let has up until now been

very common indeed. PPS3 requires the efficient use of land and density policies, though they

may vary for different areas. Local authorities are under pressure to meet the government-


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imposed housing or dwellings numbers targets. Flats may be seen by the developer as more

profitable than houses per hectare as it were, and flats may make a greater numerical

contribution to the dwellings targets of the local authority. There is a good deal of opposition

among the public and local residents and elected members of local authorities to the

development of flats. The professionals generally prefer to see more balanced communities.

Flats can change the character of an area, especially an area of traditional residential houses.

Flats bring more people, often young people, often people who are not particularly socially

considerate to their neighbours, and more traffic and parking problems. The area does not look

and feel so nice as it used to. And, dare one say it, without being too pejorative, not such a

nice class of people come to live in the area.

The family man is finding increasing difficulty in finding a house suitable for the family

needs, and suitably located and priced. He cannot afford the high prices for houses, and he

cannot compete with the high rents paid collectively by students and others living under the

same roof. So has arisen the demand for more family housing. Accordingly some local

authorities are putting or contemplating putting a family housing policy into the core strategy

and LDF, e.g. minimum x per cent family housing required in new developments subject to

certain minimum thresholds, and the requirement for no net loss of family housing previously

on the site.

Recommendations

Potential recommendations for further study include:


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1. This research focused on buy to let market in the context of recent credit crunch. Itcould be worthwhile to see if the same pattern exits in the mortgage market in the UK.

2. This research focused on metropolitan areas. It is not known whether the buy-to-letmarket was impacted in rural areas.

3. This research focused on housing purchase. Does the factor of credit crunch have anyeffect on treatment in the rental process?

4. Another potential topic would be real estate agent characteristics regarding minoritypopulations. A possibility could exist that older agents could discriminate more so than

younger agents. The size of the real estate office could also be a factor.

A suggestion for future research could be to give more attention to the experience level

and characteristics of the testers. The differences between them could also influence the

outcome of the data. Since this is secondary data, it would be interesting to find out if it is the

real estate agent that brings up the subjects of financial assistance, suggesting lenders, and

discussion of down payment or was it the tester that brought up the subjects.


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