Section A — Stimulus material: The UK private rented sector
Figure 1: Average monthly private rent in London rose from £2100 in 2023 to £2250 in 2024, while average rents in England rose by about 9%. Around 4.6 million households in England rent privately.
Extract 1: The number of homes available to rent has fallen as some landlords sell up, citing higher mortgage rates and tax changes. At the same time demand has grown because high house prices and interest rates have delayed first-time buyers. Building new homes takes years because of planning delays and shortages of skilled workers.
Extract 2: Some campaigners want rent controls that would cap rents or limit annual increases. Scotland introduced a temporary rent freeze in 2022. Critics argue that controls reduce the supply and quality of rented homes, while supporters say they protect tenants from exploitation in a market where they have little bargaining power.
Section A — Stimulus material: The UK private rented sector
Figure 1: Average monthly private rent in London rose from £2100 in 2023 to £2250 in 2024, while average rents in England rose by about 9%. Around 4.6 million households in England rent privately.
Extract 1: The number of homes available to rent has fallen as some landlords sell up, citing higher mortgage rates and tax changes. At the same time demand has grown because high house prices and interest rates have delayed first-time buyers. Building new homes takes years because of planning delays and shortages of skilled workers.
Extract 2: Some campaigners want rent controls that would cap rents or limit annual increases. Scotland introduced a temporary rent freeze in 2022. Critics argue that controls reduce the supply and quality of rented homes, while supporters say they protect tenants from exploitation in a market where they have little bargaining power.
1(a)2 marks
Using Figure 1, calculate the percentage increase in average London rents between 2023 and 2024.
1(b)4 marks
Explain why the supply of rented housing is price inelastic in the short run.
1(c)6 marks
With the help of a supply and demand diagram, explain why rents have risen.
1(d)8 marks
Using a diagram, analyse the likely effects of a rent cap set below the market equilibrium.
1(e)10 marks
Evaluate whether rent controls are the best way to help tenants in the private rented sector.
225 marks
Section B
Evaluate the view that monopoly is always against the interests of consumers.
325 marks
Section B
Evaluate whether 'nudges' are more effective than taxation in reducing harmful alcohol consumption.
Finished?
Answer every question to finish (7 left), or finish when the time’s up.
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This paper is written by Plasmo in the style of the OCR A-Level Economics exam. It is not a past paper and is not produced or endorsed by the exam board.
OCR A-Level Economics Mock Exam: Paper 1: Microeconomics | Plasmo