Contemporary Business Environment

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CONTEMPORARY
BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Average Prices of House in the UK Changed Over the 2009-2019 Time-Period.......................3
Economic Determinants of the Changes......................................................................................5
Government Action’s Impact on Housing Market......................................................................7
Covid-19 Impact on Housing Market..........................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Top-level management in most businesses tries to improve different strategies and tactics
for properly dealing with impact of many internal and external factors of business environment.
Generally, these factors affect business in both manners positively and negatively. That’s why,
existing management of every business has highly required to develop some strategies which can
be contributed in properly dealing the influence of external and internal factors (Dufitinema,
2020). This report discusses the impact of different factors on the United Kingdom’s housing
market. This is topic is too necessary to properly analyse the UK’s housing market. Some major
actions of local government also have been mentioned in this report which it has taken during the
2009-2019 time period. There is influence of coronavirus (covid-19) on the UK’s housing market
has been discussed within the report as well.
MAIN BODY
Average Prices of House in the UK Changed Over the 2009-2019 Time-Period
Within the 2009 to 2019 time period, the prices of house in the UK has continually
changed because of lots of reasons. According to various housing market specialists, prices of
houses within the country are regularly decreasing from the year 2009 to date. Brexit also one of
key reason behind housing prices falling in the United Kingdom (McKee, 2019). The average
price/cost of a house has dropped with 1.7% within June from last month, with approx.
£218,902. This rate comes after the gain of 0.9% with May. Generally, this is the biggest
monthly drop, since February, 2009. Average house price was £147,746 within the time period
February, 2009.
In year 2009, the United Kingdom’s housing market was badly influenced by the great
recession, in which that was very challenging time period to many of companies and ventures
which was operating business operations within the UK’s housing sector. In 2009, there was not
only the housing industry get affected through the great recession, on that time every industry of
the UK was badly affected through that great recession. Many housing businesses was get
affected for closing their operations of business, because due to financial crisis of 2007 most
customers within the country was not able for purchasing the new house. In year 2008, the UK’s

housing sector was improving themselves from the last year’s financial crisis, however suddenly
in the year 2009 the global recession time period was started. In that situation, due to financial
crisis of 2007 and global recession of 2009 was fully decreased the prices of new houses within
the market in the 2009 to 2019 time period (Zhu, Betzinger and Sebastian, 2017). Because of
global recession, lots of companies or businesses were completely closed. In that situation, lots
of local people of UK was lost their respective jobs because of these factors. Lastly, factor of
unemployment was directly influenced to the United Kingdom’s housing market.
Figure 1: June’s biggest 1.7% Fall since February, 2009
Source: Kollewe, 2020. (UK house prices fall at fastest rate since 2009 amid coronavirus crisis)
According to many housing market specialists, buying a house is not a mini thing to a
person, or specially to those people who comes from low-income group. On that time, when
great recession has happened, then lots of people was ignored to purchase a new house, juts
because they have no employment. On that time, many people or customers were tried for saving
their money to fulfil their essential needs and wants. In year 2011, unemployment rate was
increased by 8.3% within the UK. This is the key reason that, the 2009 to 2019 time period was
not much favourable for many of housing businesses and companies, and still not favourable
because nowadays whole world is facing economic slowdown due to coronavirus (COVID-19)
pandemic (Pawson, Milligan and Yates, 2020). This 2020 is too worse than the great recession of
2009 for housing market of the UK. In year 2016, the government of UK was decided for exiting

from European Union, so that the local government’s this decision was also not too good for the
United Kingdom’s housing market.
Economic Determinants of the Changes
Economic factors highly impact to the United Kingdom’s housing market. The UK’s various
sectors are giving their huge contribution for the improvement of UK’s economic conditions. So
that, the country’s housing market also contributes within the nation’s gross domestic products
(GDP). Of course, because of great recession of year 2009 the housing sector of the United
Kingdom was negatively impacted, but many other industries or sectors were not badly impacted
as this housing sector because of recession. Nowadays there are many of MNCs present in the
UK, in which these MNCs are enough for this country to gain huge amount of foreign exchange.
There are Marks and Spencer, Tesco, Virgin group, British Petroleum, Unilever and Vodafone
etc. re some key multinational brands of this country which has offered high employment
opportunity to many local people here. On the other hand, micro and small businesses are also
providing their high contribution in economy growth of the United Kingdom, in which these
businesses also have provided great opportunities of employment to many of people within this
country (CHADHA, 2018). So that, these all mentioned economic factors are directly
influencing to the United Kingdom’s housing market. Generally, when most people within this
nation has proper employment, then these people can be easily invested for purchasing a house.
Generally, the United Kingdom’s economic factors has started for positively affecting to
the existing housing market from the previous few years. Basically, when the United Kingdom’s
government was decided for leaving European Union (EU). Then this aspect has impacted
housing companies and ventures in both ways positively and negatively. Suppose the country
was faced something economic slowdown within 2017 because of Brexit’s decision, however at
the beginning of year 2018 the United Kingdom’s finance ministry enhanced own economic
conditions at the international level. Then the UK’s economic factors have started positively
influencing to existing housing sector. Before 2020, all things were going perfectly to this
housing sector, but in Feb, 2020 housing sector once again badly impacted by coronavirus
(Covid-19) pandemic. From Feb of 2020 to date, housing sector still not overcome by falling.
Reason is, the country’s economy is regularly decreasing due to total lockdown situation.
Currently the United Kingdom’s finance ministry tries to run its economy productively, but

ministry not succeeding in finding proper way to productively run its economy (Ding, 2016).
Currently, lots of people has not interested for buying houses, because they are trying to invest
their fund only in those areas which are very essential for them. Currently different businesses
and companies which are running own operations within the United Kingdom’s housing industry
need for developing some too productive business tactics which can be attracted new customers
in this slowdown condition as well.
On the basis of the United Kingdom’s existing economic conditions, currently only those
people take interest for purchasing new houses who generally comes from the high-income
group. People who generally comes from low and medium-income groups are nowadays focuses
on investing fund on only such areas which are very essential for them. According to various
business experts, the United Kingdom’s housing sector will be suffered from economic
slowdown in the next few years as well just due to present pandemic. Upper management within
a housing business need to take patience for few upcoming months, because present economic
conditions are not much favourable for this housing sector. On the other hand, if a housing
business want for running its operations in existing economic conditions as well, in which it will
need to offer some low rates of houses to customers than the rates of previous years. Generally,
lots of people in the country comes from high-income group, because the UK is too rich country
in the world (Williams, Wilcox and Whitehead, 2018). So that, if housing businesses run some
productive marketing campaigns within different market places, then these businesses will be
enabled to affect people to buy new houses in present economic situations as well.
In the year 2016, the United Kingdom’s government was decided for exiting European
Union (EU). European union is generally a group of nations where all countries of Europe come
together to develop, grow and achieve productive outcomes. However, there are some conditions
which each member country have to follow that, each member country of EU responsible to
follow or adhere various conditions, legislations and rules & regulations which has formulated
by the administration of European Union. That’s why the government of country was decided for
leaving EU in year 2016 to make and implement own legislations, regulations and standards. So
that, this decision of government has positively impacted its economy. Now government of the
UK enable to make own ethical and legal considerations on the self-basis. Nowadays housing
market of the UK get positively affected by Brexit decision of government. Reason is, after

Brexit, local government of the United Kingdom was taken those steps which can generate huge
employment opportunities here. Suppose government has started to provide loans with too low
rates of interest to many small and medium sized ventures (Szumilo, 2019). Generally, small and
medium sized ventures or businesses are backbone for the United Kingdom’s economy, because
nowadays these businesses have provided more than 50% opportunities of employment within
this nation. So that, this factor of the UK’s economic has positively affected to present housing
market.
Many of economists and economy experts have predicted that, this country will be again
developed own economy at the starting of 2022. Basically, the UK’s economy has badly
impacted through the coronavirus (COVID 19) pandemic. In the last few months, lots of people
has lost their respective jobs because of this pandemic within this country. There is average rate
of a house has dropped 1.7% in June in comparison of May with £218,902, because of lockdown,
that has imposed by the UK’s local government to protect and safe its people from coronavirus
(Ozun, Ertugrul and Coskun, 2018). Recently average rate of house dropped 1.7%. Before 2020,
housing businesses were purchased different houses to sale them on something higher rates. But
now these housing businesses not able for selling houses on purchasing rates. According to these
all factors of economic, there are housing businesses should put their great efforts to easily sale
houses in this country.
Government Action’s Impact on Housing Market
The United Kingdom’ government is too helpful for all businesses in this country,
because the key motive of government is to build an ethical environment of business in that zone
which comes within its own command (Sanderson, 2019). So that, different housing businesses
enable to take great advantages by this feature of the local government. The government takes
various actions in the welfare of present companies and ventures. For example; It has taken
decision to exit European Union in year 2016. On the basis of government, businesses can be
enabled to grow themselves after Brexit, and the government was right. Nowadays existing
businesses of the UK need to follow and adhere only those ethical and legal considerations
which has formulated by local government of this country.
Many times, the government of UK runs various campaigns, in which it tries for
encouraging youth to begin start-ups and new enterprise. So that, government’s this action

increases numbers of housing businesses also within this country, because lots of people get
encouraged to begin a new venture in the housing industry. The main objective of local
government is to enhance businesses and ventures in its area of authorisation, because ventures
always give excellent contribution in the country’s gross domestic product. On the other hand,
when numbers of ventures increase within the nation, then government can be enabled for
solving unemployment issue as well. This is the reason that, the UK’s government mostly tries
for encouraging people to begin new businesses and ventures. If any person wants for starting a
new business within housing sector of this country, then that person responsible for registering
own new business within the nearest governing office of business management (Morrison, 2018).
According to government, no person and business has allowed for operating own operations of
business without registration. This prime aim of government behind formulate this regulation is
to maintain an ethical environment of business within this country.
After Brexit, government of the UK launched too appropriate taxation policy for all
businesses, so that housing businesses also enable for taking great advantages by local
government’s this action. Generally, a housing business of the UK has no required to pay high
fund in the taxation, this too excellent aspect to this housing sector. On the other hand, a housing
business and a customer has no required for fulfilling complicated legal formalities during
buying and selling various houses. Generally, few years ago when a business sold house to a
person, in which both was need for completing a complicated formality of paperwork. So that,
recently local government has taken action for making buying-selling process of house simpler.
This action of government has positively affected to housing sector of the country.
Covid-19 Impact on Housing Market
2020 is not much appropriate to housing sector of the UK, because from the starting of
2020 to date, whole United Kingdom and many of other countries also are suffering from the
coronavirus (COVID-19) pandemic (Naoi and et.al., 2019). Regularly thousands of people get
infected by coronavirus. So that in March of 2020, the UK’s government has taken decisions
towards establishing full lockdown in whole nation. Recently government within every country
has decided for establishing full lockdown in their respective nations, so that this aspect has
badly impacted to housing businesses of the UK. Nowadays a housing business responsible to
close its offices because of lockdown within country. Currently each sector and each industry

within the United Kingdom is facing slowdown. Businesses not enable to sale their services and
products, because market places are fully empty.
Most people have scared for going into the market, because people’s mind-set is, if they
go into any market place, then they can be infected by coronavirus. So that, different housing
businesses not enable sale houses within different market places. According to many business
specialists, housing industry is one of such industries that have to take some patience. Reason is,
now housing industry responsible for putting its great hard work for once again enabling to
generate huge revenue. On the other hand, lots of people in the UK has lost own jobs due to this
pandemic situation. Of course, lots of repeated housing businesses of country are going very hard
work to sale houses in lockdown as well, however these businesses are not succeeding
(Fitzpatrick and Pawson, 2016). People’s attitude & interest plays great role in housing industry.
But when we have analysed existing market situations, then we can be realised that many
customers and people are showing no interest for purchasing a house. So that this 2020’s
pandemic has negatively and also very badly impacted to the United Kingdom’s housing
industry.
Before coronavirus, housing industry was too popular in this nation, because many
businesses and ventures in housing industry was able for gaining huge profit margins in the
single financial year. However nowadays situations have fully changed. Reason is, nowadays a
housing business can’t simply sale own services within the market because of coronavirus
pandemic. The UK’s local government is trying to take possible steps towards one again
improving housing sector in country. Nowadays existing management of housing businesses
hopes that, these pandemic situations will become controlled very soon, and these businesses
will be enabled to gain high profit margins within the United Kingdom’s housing market.
CONCLUSION
It can be concluded that currently many of factors are highly influencing the United
Kingdom’s housing sector. Within 2009 to 2019 time-period, this sector was the first time
negatively impacted by global recession of 2009, then this sector impacted in year 2016 as well,
when the UK’s local government was taken step of Brexit (Aldridge, 2018). So that after Brexit,
housing businesses was progressively running their operations of business. However, in the

starting of year 2020, these housing businesses has impacted by the coronavirus (COVID 19)
pandemic. Existing year is one of the hardest time periods to the United Kingdom’s housing
sector, because businesses or ventures which are part of housing industry not enable to sale own
housing services within the market place just due to total lockdown. Owner of these businesses
are hoping that, housing sector will be grown once again. However, these businesses has
required to adopt and implement some excellent strategies of business to gain many of new
customers within the United Kingdom.

REFERENCES
Books & Journals
Aldridge, S., 2018. The Housing Market: Challenges and Policy Responses. National Institute
Economic Review. 245(1). pp.R5-R8.
CHADHA, J., 2018. The Housing Market.
Ding, F., 2016. Three Essays on the Housing Market. (Doctoral dissertation, University of
Warwick).
Dufitinema, J., 2020. Volatility clustering, risk-return relationship and asymmetric adjustment in
the Finnish housing market. International Journal of Housing Markets and Analysis.
Fitzpatrick, S. and Pawson, H., 2016. Fifty years since Cathy Come Home: critical reflections on
the UK homelessness safety net. International Journal of Housing Policy. 16(4).
pp.543-555.
McKee, K., 2019. Generation rent is a myth-housing prospects for millennials are determined by
class.
Morrison, N., 2018. 12 Innovative affordable housing finance delivery model in
England. Affordable Housing Governance and Finance: Innovations, partnerships and
comparative perspectives.
Naoi, M., and et.al., 2019. Household mortgage demand: a study of the UK, Australia and
Japan. International Journal of Housing Markets and Analysis.
Ozun, A., Ertugrul, H. M. and Coskun, Y., 2018. A dynamic model for housing price spillovers
with an evidence from the US and the UK markets. Journal of Capital Markets Studies.
Pawson, H., Milligan, V. and Yates, J., 2020. Private Rental Housing: Market Roles, Taxation
and Regulation. In Housing Policy in Australia. (pp. 177-215). Palgrave Macmillan,
Singapore.
Sanderson, N., 2019. The key to unlocking UK housing. Property Journal. pp.56-58.
Szumilo, N., 2019. New Mortgage Lenders and the Housing Market. Available at SSRN
3171498.
Williams, B. P., Wilcox, S. and Whitehead, C., 2018. Reducing the risks of mortgage default and
possession in the UK; an international perspective. HOUSING FINANCE. p.48.
Zhu, B., Betzinger, M. and Sebastian, S., 2017. Housing market stability, mortgage market
structure, and monetary policy: Evidence from the euro area. Journal of Housing
Economics. 37. pp.1-21.
Online

Kollewe, J. 2020. UK house prices fall at fastest rate since 2009 amid coronavirus crisis.
[Online]. Available Through: < https://www.theguardian.com/business/2020/jun/02/uk-
house-prices-fall-coronavirus-nationwide >.