Impact of COVID-19 on UK Housing Market

Contemporary business
environment
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Table of Contents
INTRODUCTION...........................................................................................................................3
How have average house prices in the UK changed from 2009 - 2019?.....................................3
What are economic determinants of changes that occurred?.......................................................6
How has government action in 2009-2019 affected the UK Housing market?...........................8
What would be the impact of COVID-19 on UK Housing Market?...........................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
In recent times, the pandemic covid 19 has adversely impacted on global economy and all
sectors and countries economic growth. basically, the impact is more on developed countries as
compared to developing one. the housing sector is main pillar of growth in infrastructure. so,
there is decline in its growth as well in UK. in UK there is a great contribution of housing sector
in its GDP. In that many companies are operating in it. Since 2009 there has been many changes
which has occurred in it. The new reforms and policies are formed and applied. Government has
taken several steps to increase it growth (Alencastro, Fuertes, and de Wilde, 2017).
In this report it will be described about how average house price has changed in UK.
besides, what are economic determinants of change ad action taken by government in 2009-
2019. along with that, it will be discussed on covid 19 will affect on this sector.
How have average house prices in the UK changed from 2009 - 2019?
In UK housing sector is most important as it highly contribute in GDP as well as economic
growth of nation. it has been evaluated that since past 10 years the industry is rapidly growing
and there are many changes observed in price of houses. Also, it is identified that prices of house
depend on many factors that are demand and supply, market condition, economic growth, loan
policy and many others. so, any change in all these factors led to fluctuate in prices of house.
thus, it results in change in growth of industry (Stone, and Berrington, 2017).
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It is analysed from graph that since 2009 there is decline in prices of house. the was a fall of 10%
in price in July 2010 (Alqaralleh, 2019). however, there was rise in price from year 2012 to
2016. besides that, there has been many ups and downs in average price of house in UK. this has
highly impacted on economic growth of nation. moreover, there was decline in interest rate of
housing industry. it is identified that when there is increase in interest rate by 1% than housing
rate decline by 3%. also, in 2016 average annual bank rate was 0-1 %. hence, there is decline in
11% in bank rate since last 10 years. Mortgage rates and the Bank of England base rate do not
move with each other. In January 2009 the average standard variable rate was 7.6 %; in January
2016 this had decreased to 4.2 % .
Besides that, in UK housing sector growth is declining which has led to fall in price of it.
the main reason behind that is Brexit due to which economic growth is affected. so, it has led to
impact on housing sector. the demand has fallen down that has affected on income level of
people. alongside, interest rates are modified as well because government is not able to provide
loan to people.
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