Factors Affecting Price of Rental Housing in the UK

Economics for Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Supply and demand analysis to identify the main factors in determining the price of...............1
private rental housing in the UK................................................................................................1
TASK 2............................................................................................................................................9
Explaining government policies which can be used to influence the demand of private rental
housing in the UK.......................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
The are of research that is related with manufacturing, spending as well consuming
number of product and services over a particular period of time is known as economics. In
modern business era, it is crucial to examine the influence of economics on a particular company
which support in better and appropriate functioning in nearby future (Gillespie, 2013). Supply
and demand are consider to be most important element that support in making various decision
related with economics circumstances.
In this report, the concept of supply and demand are described with their impact over
private rental properties in UK. There can be number of other factors which can influence the
price of private house available for rent in UK.
TASK 1
Supply and demand analysis to identify the main factors in determining the price of
private rental housing in the UK.
In economic term, the concept of supply and demand are the crucial factors that are
strongly interlinked with one another and due to changes in each factors intend to impact the
prices of goods and services.
Law of demand, defines that in case if all other elements are fixed and if price increase
than demand use to decrease or vice versa. Thus the relation among quantity demanded and price
are inversely connected to one another (Law of demand, 2020).
Illustration 1: Demand law
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Law of supply, is describe as the if all factors of microeconomics are constant and if price
rise by certain percent then supply is also going to increase (Law of supply, 2020). Thus, the
relation between quantity supplied by the supplier and price is positive and vice versa.
Illustration 2: Supply law
It is clear from the above graph that both supply and demand have a impact over prices of
any product which is required in market by large number of individual. Thus, it can be stated that
demand and supply can influence the prices and availability of private rental properties in UK.
There are various demand elements that are mainly reasoned when evaluating the price changes
of houses such as population, availability of mortgages, interest rates, economic growth,
affordability of housing, taxation and even more. Similarly some elements of supply have also a
significant affect over the price of house available on rent such as new constructions, availability
of rental houses etc.
Main elements that impact the price of private rental houses in UK.
There are different demand side elements which help to identify the price of houses in
UK marketplace. These are elaborated underneath:
 Economic growth: It is one of the most important demand side determinant that have a
vast influence over the rental cost of houses in UK. The concept of economic
development have a wider scope which is related with growing of various circumstances
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