1 (c)
Possible reasons include
many builders in the town so competition brings down prices in order to gain the job
high unemployment would bring down wages lowering firms’ costs allowing lower prices
recession has reduced work so builders price low to attract customers.
1 (d)
Possible suggestions/reasons include:
Savings – high interest rates make it more attractive to save their inheritance so less likely
to buy the house
Mortgage – if they already have a mortgage, high interest rates mean higher repayments so
less likely to buy house
Recession – low interest rates could be an indication of a recession so they might be
reluctant to buy a house in a falling market
House prices – low interest rates could stimulate demand for houses, pushing up the price
of houses making it a worthwhile investment.
1 (e)
The following issues may be considered
the opportunity costs of giving up a rate of interest - £3000 a year in lost interest
the risks involved in buying a house to be looked after by an 18 year old
additional running costs eg unexpected repairs
could help Robbie get on the property ladder so would be a good thing
could prove to be a good investment with lodgers paying to stay there
whether it is right that Robbie receives his lodgers’ rent – rather than his parents.
