Factors Determining Prices of Rental Housing in UK

RENTAL HOUSING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Using demand and supply analysis identify main factors determining prices of rental housing
in UK. ..........................................................................................................................................1
TASK 2............................................................................................................................................5
Identifying and explaining main economic/government policies that will be used for
influencing demand for the private rental housing .....................................................................5
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Economics is defined as the study of distribution, production and consumption. It is
divided in two main categories that are microeconomics and macroeconomics. Macroeconomics
deal with the aggregate quantity like outputs & national income. Roots are connected with
microeconomics that factors such as market and the decision-making process of the individual
economic units. It is the starting point to economics. Demand & supply analysis refers to the
study of buyers & sellers interacting for determining the transaction prices & quantities. Prices
have effect over both the values to buyer of next unit and costs to seller of the unit. The report is
based over the government and economic policies which could be used for influencing demand
for the private rental housing in UK. Report will cover the demand and supply analysis with
factors determining the prices for rental property in UK. It will also provide about the
government policies which could be used for influencing demand for rental housing.
TASK 1
Using demand and supply analysis identify main factors determining prices of rental housing in
UK.
In UK privately owned properties are either leasehold or freehold. Freehold refers to the
land and property owned on land. Leasehold refers to the property that is not owned and rights
of using the property and land are reserved by the owners of property. Under the rented
properties, landlords rent their property by the tenancy agreements for specified period of time,
which can be renewed. Monthly rent is paid by tenants, throughout the renting period. This is
helping the household section to grow more efficiently and effectively. There are several factors
that are responsible in determining the prices of the rental housing property.
As per the government informations millions of people are spending above half of their
incomes for covering rents or mortgage. Supply of the affordable units declines, as landlords
have found it more profitable in converting their governments subsidized properties into the
apartments and condominiums at the market rate (Delgado, 2016). It is reviewed that majority of
people spend 30 % of their income on housing. Government programmes have helped the
economy to secure the affordable housing.
Housing market is different from that of the products market due to various reasons,
including durability, immobility and different features like location size and the floor plan. Due
to the heterogeneous & immobile nature of housing market it is split into number of sub-markets
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