Impact of Government Action on UK Housing Market

This report discusses the impact of government action on the UK housing market from 2009-2019. It covers changes in house prices, economic determinants, and the impact of COVID-19.

Contemporary
Business
Environment

Table of Contents
INTRODUCTION .....................................................................................................................3
MAIN BODY.............................................................................................................................3
Changes in prices of houses in UK from 2009 to 2019..........................................................3
Economic determinants for changes in UK house prices ?....................................................8
How has government action over the period 2009-2019 affected the UK Housing market?
..............................................................................................................................................10
Impact of COVID-19 in reltion to Market of Housing in UK?.........................................12
CONCLUSION .......................................................................................................................13
REFERENCES ........................................................................................................................14
Books and journals...............................................................................................................14

INTRODUCTION
Business environment can be well-defined as a place surrounded by the business of an
organisation where the organisation is working environment includes different factors which
are related to internal and external outcomes as well as functioning of the organisation within
the nation where it is facilitating in providing the goods and services to fulfil the needs of
customers. There are various kinds of businesses in a business environment which are related
to supply of goods and services for the satisfaction of human want businesses have different
purpose some of these are profit oriented and some are non-profit organisations which are
meant to provide services to individuals who live within the society (Gambetti and Musso,
2017). There are various external and internal factors within a business which can be
identified by the use of proper Framework, in context of the current report there is discussion
about different business environment of the UK where the main focuses on paid on housing
market.in the beginning of this report there is discussion about how the average house prices
in UK have change for the period from 2009 to 19 and their impacts. After that, there is
discussion about what are the economic determinants and the changes which are arises
because of increment in average houses prices within the UK from the period of 2009 to
2019. Then after, it is also identified that how the government action within the UK housing
market are influenced and their impact within the period of 2009 and 19. In the last of this
report, there is identification and prediction related to the academic covid-19 and its impact
on UK housing market. There is also discussion about different impacts of covid-19 on the
housing market.
MAIN BODY
Changes in prices of houses in UK from 2009 to 2019
For understanding the fluctuations between the usual housing values in the UK from
the year 2009 to 2019 it is important to identify what is average house prices. Usual house
prices are a midpoint of all house units sold at a market price in particular period of time. It
can also term as mean price which is equivalent to average price where the addition of the
sale prices of goods jointly and then separate by the number of sale (Knoll, Schularick, and
Steger, 2017).

In context of UK, Data dramatically changes within the 10 years from 2009 to 2019 in the
housing prices. Under this, it can be evaluated that average housing prices within the UK has
a sharp increase of 4.9 % in year 2009 in the beginning of June. This increase is continue till
may 2019. This is because there are various factors like government intervention in
increasing the housing system as well as infrastructure development within the UK increase

the market of real estate.
It can be evaluated from the above mentioned graph that average housing prices
within the England and region of UK are growing from 2009-2019. In relation to London,
there are different kinds of factors within the economy which are related to hike in these
prices. These factors are social factors and other economic factors which impacted on the
prices. In relation to London, there is a better infrastructure with number of amusement parks
and other facilities which attract the customers and increase the average housing prices
because of high demand. It can be seen from the graph that England has more price
fluctuation in comparison to other sites of UK with difference of 0.9 %. (De Santis, 2020).
These are various factors which impacted in this fluctuation in prices of houses in
UK. These are availability of land, location of land and many other. Location of land
impacted on prices of houses as houses in London are comparatively costlier than houses
situated in outskirts and other areas of UK because of better location and available of large
number of resources to perform function in smooth and better way. Numerous factors of
building a house come into this. The pricing of labor at the time of building a project, the
quality of materials used in a project, the quality of the architecture of a project, the life cycle
of a project, proper and working lifts, emergency exits, and other structural aspects of the

project play a major role in deciding the overall pricing of a project. Better the structural
aspects, higher the pricing of the project. These resources are better transport, easy food
supply, capital city benefits and many more. These factors are responsible for fluctuation in
prices and are discussed in next question.
Economic determinants for changes in UK house prices ?
There are various factors which have direct impact on the housing prices within the
UK. From the above mentioned information some of these factors are mentioned below.
Growth in the economy: Economy is the director which is related to increment in the
housing average within the UK. The reason behind this is that housing demand depends on
the revenue with the advanced economic development and rising wages helps people in
spend more money on the housing as well as improving the application and boosting the
prices within the economy for housing facilities. Is directly impacted on the housing average
of United Kingdom where the housing demand is often seen and elastic in terms of income
leading to increase in revenue for the household. In the period between 2012 to 2015 there is
a recession in the economy which impacted introduction of the sale which also stop people
from buying and people who are losing their job will fall behind their models payment and
their home in despondence.
Unemployment: Unemployment is also a factor which can be considered in a growth
rate of housing usual within the economy of UK in 2009 to 2019 this is because London have
lowest unemployment ratio within full UK which impacted the positive changes and increase
in the total housing average of UK. Because the how to market is directly related to the
economic growth where very few people will have possible to afford a house who has
unemployment. This is because employment provide different facility to an individual where
we can save the money to buy a specific house for his living as well as you can also spend his
money on different housing services near arrange all the finance from its job. These impacted
on Unemployment ratio within the economic and directly impact on people from restricting
them to enter in real estate markets.
Interest rates: This is also an important economic factor which is direct impact of
increment within the housing regular in whole UK, because of government operations and
promotion of different housing accommodations within the UK. Because of direct
government intervention and low interested in the market of UK it boost the demand of

housing facilities. This is because interest rates influence the monthly payment value for the
model and high interest rate year would increase the mortgage cost and reduce the demand
for the houses to be purchased. On the other hand renting high interested make rental
attractive, Homeowner with fire at the stable mortgage rates has more significant effect on
the economy. Because of government intervention the interest rate within the UK is low
which make it easier for different customers to buy their home and increase the average of
houses.
Mortgage availability: In context of UK, approximately each Bank is easing their
policy in relation to mortgage during the period of 2009 to 2013 for increasing the amount of
individuals by providing zero mortgage facility on minimum amount of mortgage for loan of
of houses. This is helpful in increasing the sale of houses because there are a large number of
individual who can afford houses without putting a high amount of mortgage. This directly
aid commercial loan industry where the average prices of houses within the UK increased
because of high availability of known at low level of mortgage. There are number of national
banks were following the norms of international banks for providing and increasing the
infrastructure facility by creating a flexible environment of mortgage. This helps in
increasing flexibility within the process of housing loan and improves the confidence of
individual to borrow loan and buy a house.
Financial slowdown: Financial to slow down is the major factor in the economic
factors which have its direct impact average house prices this can be seen from the graph
mentioned in above question where there is a steep increase in the average housing price.
This is because there is huge growth within the economic conditions of the UK where there
are large number of investors is in the policies of the government. But from the year 2013 to
2015 and middle of 2016 is economic slowdown within the whole globe which also impacted
on economy of the UK and slows down the averages by making negative. In wheels and
northern part of Ireland the growth is in negative terms which are - 0.2 % and - 0.5%
respectively.
Cash supply: Flow of cash within the economy is also n factor which impacted the
sales of houses and average housing prices within the UK. This can be seen that due to
government intervention and continues this investment within the economy of UK there is
increase in cash reply within the economy which help increasing the sales and purchase of

houses within the economy and increasing the average prices by building better infrastructure
and appropriate system for real estate business
It can be evaluated from the above mentioned information that there are various
economic factors which are directly related to the average housing prices and impacted on the
performance of real estate business. This can be seen that UK is also facing these factors
which help in building the average housing prices and impact on the overall performance of
businesses. Is also including, the government intervention and the policies which increase the
housing prices with an UK in a regular manner.
How has government action over the period 2009-2019 affected the UK Housing market?
Government acted as an important part with in the UK housing market where it
provides different positive and negative impacts on the organisations that are trading within
the housing (Litman and Steele, 2017). This is because there are various kind of policies and
procedures which are formed by the organisation to save the interest of the consumer as well
as different businesses United who are dealing with in the housing society and marketing
facility of different houses within housing market of UK.
Impact
Low interest rates: Interest rates are the major factor which impact directly on the
sale and purchase of houses within the economy.in the year of 2019 to 2013 UK government
provided different facilities where it is the interest rate within the market where an individual
can easily take a loan for purchasing a house where the interest rate are also minimum. Self
and boosting the purchase of houses with in the economy as well as give rise to increment in
aggregate sale of houses.no interest also increase the attraction of different peoples as well as
help them in managing there finance for purchasing different type of houses (Chen and Wen,
2017).
Subsidies: Subsidies are the most important factor which impacted the prices within
the UK economy in relation to the houses and direct manner. For boosting the sales of houses
and developing better infrastructure government provided different kind of subsidies in
relation to houses which include subsidy on interest subsidy on purchase of house by a
middle class family and subsidies according to the income. From the period of 2003 to 2016
there is there is great boost and increment in real estate business which help in increasing the
houses prices. (Burnside, Eichenbaum and Rebelo, 2016)

Valuation of land: Land is the basic resource which is required to build a house.
there are various policies regarding the valuation of land within the up which differ from
every continent to continent. For improvement in the sales of different businesses in the year
2016 UK government bring a separate law which is directly related to using the policy of
valuation of the land where different customer can easily afford the houses (Stroebel and
Vavra, 2019). Also provide facility to two different real estate dealers where they can
increase their market as well as attract large number of customer because of easy policies and
evaluation of length which cost low tax burden on every individual.
Cash flow: This is also important factor which is in hand of the government and can
be executed for boosting the sales and purchase of houses with in the economy and boosting
the economy real estate business. In context of UK government, in the year of 2016 when real
estate business is going from its nightmare, UK government implemented various kinds of
techniques and increasing the cash flow is one of them. For this government started investing
in various kind of activities related to real state where it can refuse pictures within the
economy and who's the real estate business by providing adequate cash within the different
activities related to housing and other functions (Favilukis, Ludvigson and Van
Nieuwerburgh, 2017).
It can be evaluated from the above mentioned information there are various factor
within the economy which are related to organisations performance. This factor directly
impact economic conditions can help in boosting the saints of houses and increasing the
average prices. Along with this, government also use different kind of factors which help in
boosting the economic conditions and battering the decisions by managing their credibility.
Impact of COVID-19 in reltion to Market of Housing in UK?
Covid-19 is that which impacted damagingly on the whole world and acted as a
nightmare. This also impacted directly on the UK housing market which reduce their growth
as well as stop all the workings because of mass spread. UK is suffering hardly from the
covid-19 virus where there is large number of deaths as well as long lasting lockdown within
the whole economy. There are various impacts of covid-19 on the UK housing market some
of these are described below.
Reduces cash flow with an economy: Because of covid-19 mass spread UK has to
shut down all its operations related to each and every aspect of economy. This also reduces
the economic growth of the UK as well as impacted negatively on the performance of

different functions related to housing cash flow is the major important part within the cash
flow is the major important part within the housing market of UK purchasing houses
according to their budget. But because of this they have to save money for future because
there is no economic activity within whole nation which decreases the cash flows in the
economy and impacted negatively on the business of UK housing market (Price and Nguyen,
2016).
Low availability of finance: Covid-19 different economic crisis within the UK which
also affected on the employment and other functions of the economy and directly associated
with the financial resources of the economy. Because of covid-19 government have to move
focus on healthcare facilities and infrastructure related to healthcare facilities demanded high
level of investment which also bring financial crisis within the economy because of high
investment on development of infrastructure related to healthcare facilities.
Changes in trend: Covid-19 directly wedged on the monetary system and fund of
individuals who are people within the globe as well as in UK as they have to spend more on
healthcare facilities which is directly related to their savings. Because of mass lockdown
there is no economic activity within the UK which impacted on the business of individuals
and also impact on the savings in negative way. Now individual started spending more
amounts on healthcare and changing their trend towards saving the money not on investment
(Zhang and Zoli, 2016).
Increase cost of land, labour and material: Covid-19 also impacted negatively on
the land labour and material which are directly related to housing markets of United
Kingdom. As because of covid-19 large number of labours within which are involved in
housing market are now migrate from UK because of non-availability of work. the prices of
land and material is also increasing which impacting negatively on the organisation because it
increased their cost within the production of different houses as well as building different
infrastructure related to housing market. It can be evaluated from the above mentioned
information there are various factor within the economy which are related to organisations
performance. This factor directly impact economic conditions can help in boosting the saints
of houses and increasing the average prices. Along with this, government also use different
kind of factors which help in boosting the economic conditions and battering the decisions
bye managing their credibility. (Pigou, 2016).

CONCLUSION
It can be evaluated from the above mentioned report that UK housing business is
increasing continuously where the average housing prices will the UK have changed from the
year 2009 to 2019 this is directly related to the different economic factors and determinants
which are important in increasing this average housing prices. It can also be concluded that
government also provide different assistance related to the gas supply mortgage availability
and increasing the impact of this function. but there are various negative impacts of covid-19
in the future of UK business markets where it reduce the cash flow finance as well as impact
on cost of land labour and material which will stop the functions and reduce the chances of
success within different areas of this type of market.

REFERENCES
Books and journals
Burnside, C., Eichenbaum, M. and Rebelo, S., 2016. Understanding booms and busts in
housing markets. Journal of Political Economy, 124(4), pp.1088-1147.
Chen, K. and Wen, Y., 2017. The great housing boom of China. American Economic
Journal: Macroeconomics, 9(2), pp.73-114.
De Santis, R.A., 2020. Impact of the asset purchase programme on euro area government
bond yields using market news. Economic Modelling, 86, pp.192-209.
Favilukis, J., Ludvigson, S.C. and Van Nieuwerburgh, S., 2017. The macroeconomic effects
of housing wealth, housing finance, and limited risk sharing in general
equilibrium. Journal of Political Economy, 125(1), pp.140-223.
Gambetti, L. and Musso, A., 2017. Loan supply shocks and the business cycle. Journal of
Applied Econometrics, 32(4), pp.764-782.
Hilber, C.A. and Vermeulen, W., 2016. The impact of supply constraints on house prices in
England. The Economic Journal, 126(591), pp.358-405.
Knoll, K., Schularick, M. and Steger, T., 2017. No price like home: Global house prices,
1870-2012. American Economic Review, 107(2), pp.331-53.
Litman, T. and Steele, R., 2017. Land use impacts on transport. Canada: Victoria Transport
Policy Institute.
Pigou, A.C., 2016. Industrial fluctuations. Routledge.
Price, W.A. and Nguyen, T., 2016. Nutrition and physical degeneration: a comparison of
primitive and modern diets and their effects. EnCognitive. com.
Stroebel, J. and Vavra, J., 2019. House prices, local demand, and retail prices. Journal of
Political Economy, 127(3), pp.1391-1436.
Zhang, L. and Zoli, E., 2016. Leaning against the wind: Macroprudential policy in
Asia. Journal of Asian Economics, 42, pp.33-52.