IELTS Writing Task 2 Sample Essays: Understanding the Impact of Interest Rates on Housing Markets (Band 6.5-8.5)

Rising interest rates and their effects on housing markets have become increasingly common topics in IELTS Writing Task 2. Based on recent exam analysis from how interest rates influence real estate values, this theme has appeared in various forms over the past two years, particularly in questions about economics and social issues.

The complex relationship between interest rates and housing market dynamicsThe complex relationship between interest rates and housing market dynamics

Task Analysis

Let’s examine a recent IELTS Writing Task 2 question:

Some people believe that rising interest rates have a negative impact on housing affordability, while others argue that they help stabilize the housing market. Discuss both views and give your opinion.

This question requires candidates to:

  • Discuss multiple perspectives on interest rates’ impact
  • Analyze economic relationships
  • Present a balanced argument
  • Provide relevant examples
  • State and support a personal position

Sample Essay 1 (Band 8.5)

The relationship between interest rates and housing markets is complex, as demonstrated by the ongoing debate about their impact on affordability and market stability. While the impact of inflation on the housing affordability is significant, I believe that moderate interest rates are necessary for a healthy housing market.

Those who argue against rising rates make valid points about affordability. Higher interest rates directly increase mortgage payments, making it harder for first-time buyers to enter the market. For instance, a 1% rate increase on a $300,000 mortgage could add hundreds of dollars to monthly payments. This particularly affects young professionals and middle-income families who are already struggling with rising housing costs in cities.

However, proponents of higher rates present compelling arguments about market stability. When rates are too low, housing prices can inflate rapidly as borrowing becomes too easy, creating potential bubbles. This phenomenon was observed during the 2008 financial crisis, where artificially low rates contributed to unsustainable price increases. Moreover, reasonable interest rates encourage responsible lending and borrowing practices.

In my view, while the immediate impact of rising rates may seem negative, they play a crucial role in maintaining long-term market health. The key lies in finding the right balance – rates should be high enough to prevent market speculation but low enough to maintain reasonable affordability. This balance can be achieved through gradual rate adjustments rather than sudden changes.

Impact analysis of interest rates on housing affordability across different income groupsImpact analysis of interest rates on housing affordability across different income groups

Sample Essay 2 (Band 6.5)

Interest rates have big effects on housing prices and people’s ability to buy homes. I will discuss both sides of this issue and give my opinion.

On one side, high interest rates make houses more expensive to buy. When rates go up, people have to pay more money each month for their mortgage. For example, if someone wants to buy a house that costs $200,000, they will pay much more when interest rates are 5% compared to 2%. This makes it hard for many people, especially young people, to buy their first home.

But other people say high rates are good for the housing market. They stop house prices from going too high too fast. When rates are very low, many people try to buy houses and this makes prices go up too much. This happened in many countries before and caused problems.

I think both sides have good points, but I agree more that high rates can cause problems for most people. The government should try to keep rates low enough so normal people can buy houses. They can use other ways to control the housing market instead of high interest rates.

Scoring Analysis

Band 8.5 Essay:

  • Task Response: Fully addresses all parts with clear position
  • Coherence: Logical organization with clear progression
  • Lexical Resource: Sophisticated vocabulary (“artificially low rates”, “market speculation”)
  • Grammar: Complex structures used accurately

Band 6.5 Essay:

  • Task Response: Addresses main points but less developed
  • Coherence: Basic organization with some progression
  • Lexical Resource: Limited but adequate vocabulary
  • Grammar: Mix of simple and complex structures with some errors

Key Vocabulary

  1. Market speculation (n) /ˈmɑːrkɪt ˌspekjuˈleɪʃn/ – Trading based on predicted market changes
  2. Affordability (n) /əˌfɔːrdəˈbɪləti/ – The quality of being affordable
  3. First-time buyers (n) /ˌfɜːst taɪm ˈbaɪərz/ – People purchasing their first property
  4. Market stability (n) /ˈmɑːrkɪt stəˈbɪləti/ – Consistent, predictable market conditions
  5. Mortgage payments (n) /ˈmɔːrɡɪdʒ ˈpeɪmənts/ – Regular installments paid on a home loan

For additional practice, consider writing your own essay about How can we address the issue of rising housing costs? Share your response in the comments for feedback.