Impact of COVID-19 on UK Housing Market

This article discusses the impact of COVID-19 on the UK housing market, including the decrease in buying power of customers and the closure of businesses. It also explores the government's actions and policies regarding housing rates and predicts the future of the housing market in the post-COVID-19 era.

Business environment
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Table of Contents
Table of Contents.............................................................................................................................3
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. How have average house prices in the UK changed over the period from 2009 - 2019?.......1
2. What are the economic determinants of the changes outlined in your answer to Question 1?3
3. How has government action over the period 2009-2019 affected the UK Housing market?..5
4. Predict what would be the impact of COVID-19 on UK Housing Market?............................6
CONCLUSION................................................................................................................................7
REFERENCE..................................................................................................................................9
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INTRODUCTION
Business environment refers as activities in relation to business that helps to increase the
organisational productivity by selling the products and services. This is important for
management to focus on all factors which helps to increase the productivity and profitability.
The forces consider suppliers, media, consumer group, economic condition (Çera and et. al.,
2019). In current business environment the situation of UK market is decreasing as many
businesses are closed and government are not allowing to them to operate and run their business.
As pandemic situation is running all over the world that has impacted on businesses negatively,
this has reduced the economic condition of a country. This is important for all to overcome from
such situation then only a business can be run properly. The aim of preparing this report is to
increase the insight about environment related business and how it has affected in changing
environment.
MAIN BODY
In business environment there are many business owners who are running their business by
selling the products and services. The sectors in relation to business involves automobile, retail
sector, super market, telecommunication, sports and others which all are running properly and
increases the productivity by increasing number of customers. This is important for organisation
to understand the needs and wants of their customers so kind of products and services can be
provided to them and maintains the profitability. The people who have different needs and wants
are dealing with changing environment which neede4d to fill and maintain the good performance
(Das and Kundu, 2018).
1. How have average house prices in the UK changed over the period from 2009 - 2019?
In UK, there are many state and areas where houses are build up and well structured. The
prices of houses are different which is important to discuss. It has been seen that prices of house
are changing from 2009 to 2019. Approximately house prices in UK increased by 0.9% in the
year to June 2019. It is unchanged from May 2019 due to Pandemic situation that has reduced
the productivity. From the last three years, there has been general slowdown in UK house price
growth, driven mainly by slowdown in south and east of England (House prices in UK from
2009 to 2019).
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The average UK house price was £ 230,000 in June 2019. This is £2,000 higher than
same period a year ago. It has been seen that average house prices in the UK increased by 0.7%
between may 2019 and June 2019. Due to Pandemic situation the cost of houses are increased as
economy has reduced which has impacted on business negatively. The prices of houses are
increasing continuously that can be challenge for customers to buy the houses at different cost.
People who wants to buy the houses need to pay the amounts which are decided by government
and authorities. This can fill the basic needs and wants of people who are living in society and
demanding their own houses. As all know London is developed and well designed country where
people has dream to have their own house. But having costly amounts of house people leave
their ideas and make decision. For taking house and construction there is need of land,
construction, design, proper furniture, facilities and infrastructure that is difficult for people to
arrange all in less time. Therefore, they shows interest to buy the well structured and design
houses by setting the prices. In other words, house price inflation is consider as a rate in which
prices of residential properties bought in UK rises and falls (Trisakhon, Onputtha and Peamchai,
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2018). For getting house in UK, there is need to fill the legal formalities and laws which are
important to run the business. This can help to increase the buying number in UK in case of
providing at fixed rates. The managers of organisation and government department should fill the
all requirement and control over the activities in high inflation rates. Due to changing demand
the inflation rate in UK are increasing so there is need to focus on value of properties. The costs
of houses in UK are increasing since 2009 to 2019 due to increasing inflation rate that limits the
buying power of customers.
2. What are the economic determinants of the changes outlined in your answer to Question 1?
Economic determinants are consider as factors which arises at the time of running
business and affected the business. This refers as economic activities which are important for
business and maintaining the performance in competitive business environment. For organisation
it is required to have focus on economical condition and inflation rate in a specific country that
can affect the business whether positive and negative ways. If economical condition of UK and
other country is good the nit become easy for organisation to operate their business and maintain
the good performance. In changing business environment it has defined that many economic
determinant are related to business that are changing day by day. The description of determinant
are stated below that are related to above discussion:
Changes in needs and wants of people – According to this, needs and wants of people
who are living in society and country are different where it become compulsory for organisation
to operate the business and maintain the performance. This is important for organisation to
understand the needs and wants of their customers then offer different types of products and
services. This is impacting on business organisation and economy negatively which reduced
organisational productivity. In UK, this determinant is consider as effective factor in which
management focuses on different needs of people and make it available that bring improvement
in economical condition.
The prices of houses, goods and services – In economy, price is the main factor which
is affecting all people and organisation in competitive business environment. If the prices of
products and services are reasonable then customers feel happy and ready to make the buying
decisions. This is important for organisation to provide the products at reasonable cost and retain
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the customers. The prices of house is another determinant which arises or increasing due to
changes in economical and inflation rates. In UK, the prices of houses in UK are increasing as it
is developed country which has impacted on economy. This can help to attracts the customers by
setting the reasonable cost and maintaining the performance in changing environment (Nedum-
Ogbede, 2018).
Income of buyers – Income group of customers are really matter as it increases the
buying power if they are earning well and good. People who wants to fill their dreams and live
standard life they are required to earn high amounts so they can spend where they wants. This
helps to increase their confidence and way of living. After Brexit, the income level of buyers are
increased as many small and large businesses are established in UK where organisation are
providing products and services at competitive prices that become opportunity for management
to maintain their business and increase the organisational productivity by increasing the
customers. This factor affected business positively is income level of buyers is low and non-
effective.
Increasing tax rates- This means tax rates are those cost which is using by organisation
by paying the tax amounts that are needed to pay and affect the businesses. It is important for
organisation to focuses on tax rate and amount which can be uses in hospitals, education, food
providing and others that attracts the customers and make the buying decisions. After Brexit, the
tax rates in UK has been reduced that has affected the business as the European countries has
eliminated from UK market which give an opportunity to small and already existing business to
operate their business by managing activities and paying the fixed tax rates.
Relationship with other country – For running business and increasing performance
there is needed to have good relationship with customers and other country. For instance, if an
already established business wants to expand their business then it is required to maintain the
good relationship with country and their government that can help or support to run business and
maintain the good performance. This can help to maintain the good performance in changing
environment and create the competition (Lam and Wong, 2018).
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Increasing employment rate - As population of UK is increasing continuously, where
people wants to get job as per their skills and qualification that can provide them satisfaction and
helps to increase their economic condition. This is important for organisation to focuses on
employment and provides a job opportunities to people so all working can be done at right time
and increase the productivity. After Brexit, the employment rate in UK has increased as many
organisation are needed people for getting the work done in different department and function
that fill the needs of job requirement and increase the performance of company by attaining the
business goals. This can help to maintain the good performance by providing employment and
increase the profit margin (Klepac and Berg, 2019).
Therefore, above discussed economic determinants in changing environment affected the
business and economy which reduces organisational productivity and profitability in competitive
business environment. This is important for organisation to consider all economic determinants
such as changing needs and wants of customers, tax rate, income level, buying power of buyers
etc. that all are related to economic factors which are needed to focus at the time of operating
business and maintaining the efficiency (Paul and et. al., 2018).
3. How has government action over the period 2009-2019 affected the UK Housing market?
Government is the legal body that have authority and power to make decision for the
purpose of regulating business and running it properly. Government is playing a role of
formulating rules and regulation that is important to run the business and make the higher
productivity by operating the business and maintain high performance (Pérez-De-Lema and et.
al., 2019). It has been seen that government of UK taken action over the period of 2009-2019
which affected the UK Housing market in business environment. Such as government has
formulated some policies and regulation for UK Housing market that states housing rates are
increasing from 2009 to 2019 due to changes in demand and tax rates that has affected the
business and maintain the profits. Government has responsibility to make monetary policy and
decide the tax rates which can help to maintain the activities. After Brexit, government has set
some regulation for real estate and housing market that reduced the selling activities and affected
the business negatively.
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In context to Housing Market, government action from 2009 to 2019 to make the
monetary policies, land registration, housing rates, VAT etc. that are increasing the rate of
houses in UK. It has also responsibility of government to formulate those people who wants to
buy the houses at low rates so formulation of some regulations cuts the interest rates to make the
borrowing cheaper. This is important for all government to make flexible policies for housing
rates and buying transaction that can help customers to buy the houses (Gaganis, Pasiouras and
Voulgari, 2019). After the year of 2009 government action regarding house rates that maintain
the productivity and economic rates. In other words, Monetary policy Committee (MPC) and
Bank of England to set Interest rates in UK so people can buy the houses and maintain the all
activities. The policies which are made by government are stabilized for houses prices that are
better for stabilisation of credit boom and bust. Houses which are under the supervision of
government should be reasonable and relevant that can help to maintain the performance
(Kopnina and Blewitt, 2018).
4. Predict what would be the impact of COVID-19 on UK Housing Market?
COVID – 19 is very serious diseases which is suffering by all people in the world. As
different countries are applying the different ways and measures to contain the coronavirus out
break, businesses have come to a grinding halt all over the world. This pandemic situation has
created many problems for people and reduced the housing market. People are so much afraid
from this situation which has reduced the organisational productivity and profitability. All
businesses and organisations are closed which has reduced the employment opportunities and
affecting the people negatively. A heavy loss is bearing by economy which reduced the
economical condition in country. It has seen that all businesses are closed and people get
unemployment which has reduced the buying power of customers so they face the difficulties
anything. For all countries it is important to get anti virus and drug of such diseases so people
can feel safe and comfortable. It has raised a big challenge for all and mainly to daily wages
labour that how will they live their daily life because they do not have money to fill their needs
and wants so they are also facing the problems. It become necessary for country to get a antidot
of corona virus so they can feel good. This problems need to be overcome so all people can live
their life and maintain a balance. All businesses during COVID-19 are not earning income and
they are retrenching the employees for the purpose of cutting cost (Onzevs and Kolerte, 2018).
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It can be difficult to predict that when such diseases will be cleared and what will the
condition of Housing market after this situation. As shown in above from the last year the cost of
houses are increasing due to changing demand and wants of people so people are investing high
amounts in housing marketing. This was the beneficial situation for all companies to operate and
run their business successfully. It can be assumed that such COVID-19 will impact on Housing
Market badly as the rates of houses and will be reduce than past years because customers will do
not having money to spend and they will buy any houses and properly as they do not have the
money. Due to Pandemic situation, people are not working regularly and they are not earning the
money which can reduced the demand of properties and houses. In UK market, number of
business are still not opened and they are continuously off since 4 months that reduced the
earning level of customers. The rates of housing market will fall 10-20% than last years which
shows there is high impact of Pandemic situation. In Market there are very less people who will
seek to buy the houses if they needed otherwise they so not spend the money on such activities.
It has been seen that after the Brexit values of properties are continuously down because all
European countries are eliminated from UK market. The mentality of people are also changing
as they wants to keep some amount of money so they can live.
Recommendation
In UK, the market situation is going down due to changes in environment that has impacted
on business and reducing the organisational productivity. After this situation, housing market
will fall more by 10-20% more that has affected the business. Real estate and housing marketing
are continuously are going down that has reduced the needs of people (So and Kim, 2018). There
is need to overcome from such situation by providing better quality of health care services. In
upcoming period it will be difficult to recover the situation and bring it up the housing market in
changing economy. People are not interested to buy the any properties at this time after making
flexible policies in business.
CONCLUSION
From the above report it can be concluded that business environment is the sum of many
factors which arises in environment and affects the business. As all world is facing from Covid-
19 situation that is a serious diseases, killed many people in a day and increasing continuously.
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This reduced economical condition and increasing poverty between people. Housing market is
consider as market where number housing led great recessions which has impacted on business
negatively. This is important for organisation to understand what is going on in market and how
all situation are affecting the business. The process of housing market are falling down in UK
market after the Brexit which has eliminated the European country and set their own business by
managing the activities. As all world is facing the problems from COVID-19 that really need a
help of health care services. Due to this diseases many people are dying and many are injected.
So it has been predicted that in upcoming period the situation of housing market will fall down
more as lack of customer’s interest and low income group which reduced their buying power in
competitive environment.
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Online
House prices in UK from 2009 to 2019. [Online]. Available through:
<https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/
june2019>
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(Çera and et. al., 2019) (Das and Kundu, 2018) (Trisakhon, Onputtha and Peamchai, 2018)
(Lam and Wong, 2018) (Nedum-Ogbede, 2018) (Paul and et. al., 2018) (Klepac and Berg, 2019)
(Pérez-De-Lema and et. al., 2019) (Gaganis, Pasiouras and Voulgari, 2019) (Kopnina and
Blewitt, 2018) (Onzevs and Kolerte, 2018) (So and Kim, 2018) (House prices in UK from 2009
to 2019)
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