The housing market will experience renewal under the following conditions.

Cuts in interest rates.

Lower interest rates increase the affordability of mortgages making it more attractive to buy and get a mortgage. Because house prices are a high % of disposable incomes, any change in interest rates can have a big effect. The Bank of England will cut interest rates when it notices that inflation is falling below the target. Ironically, the housing market may recover if the economy slows down. Because there will be lower inflation which will enable lower rates.

Increased Price of Renting.

If there is an increase in the price of renting people will look for alternatives which is buying. High rents will also encourage buy to let investors. Renting will increase in price if the number of households increase faster than the supply of housing. Therefore, an inflow of immigrants  into the economy can boost demand for renting and therefore demand for houses.

Cheap Mortgages.

In a credit crunch there is a shortage of mortgage funds and banks withdraw mortgage products. They will also increase their standard variable rates. In 2008, the Bank of England have tried to boost the supply of mortgage finance by offering to exchange mortgage debt for government securities. If there is an improvement in the flow of interbank lending, it is easier for banks to raise finance on the money markets and offer more mortgages. If mortgages are easier to gain there will be an increase in demand for houses.

Economic Growth. Because housing is one of the biggest parts of the household expenditure, the state of the housing market is related to the state of the economy. If there is a high level of economic growth and falling unemployment it will encourage people to take the decision to buy rather than rent.

Confidence. Confidence and expectations of future house price movements play an important role in determining the state of the housing market. If people expect house prices to continue to fall, then it is unlikley that house prices will recover. However, when people are confident about the future of the housing market. It will draw back people into the housing market.