Impact of COVID-19 on UK Housing Market

UK Housing Market

Table of Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................1
Ques 1: Change in average house prices in UK during the period between 2009 and 2019.......1
Ques 2: Economic determinants of changes in average house prices within UK.......................5
Ques 3: Ways in which government action during 2009 to 2019 affected UK Housing market 7
Ques 4: Predictions for impact of COVID-19 on UK Housing Market......................................8
Conclusion.....................................................................................................................................10
References and Bibliography list...................................................................................................11

Executive Summary
In UK, with increase in population due to birth rate and migration, demand of housing is
continuously increasing. This would highly impact on pricing policies of the same, which
directly influences suppliers and investors to make investment in real estate market, for meeting
the demand of people. After outbreak of COVID-19 which is one of the most severe pandemic
attack, it has been evaluated that with loss of many lives, demand and price of housing market is
highly affected, mostly in negative manner.
Introduction
The housing market can be comprehensively said to be the marketplace concerned with the
demand along with the supply of properties within the bounds of any country. One of the key
determinants for this sector is recognised to be the average prices of property being traded in the
bounds of housing market (Adams, 2020). The housing market of United Kingdom gives due
contribution to the GDP of the nation, thereby boosting the overall economy of the country. The
main purpose of preparing this report is to gain understanding of the demand and supply of
houses in this market along with the way in which these affect the average prices of property.
The current report is conducted on Hendon City which is an urban area situated within the
Borough of Barnet of London. The report seeks to gain knowledge of the determinants which
affect the average prices of houses within United Kingdom. Further, it consists of impact of
governmental action on respective business sector of UK. In the end, impact of coronavirus
pandemic on the housing market is covered.
Ques 1: Change in average house prices in UK during the period between 2009 and 2019
The housing market is the market whereby people are engaged in purchase and sale of
houses with the intention of rent, residing, investment and many more. The period between 2009
and 2019 witnessed severe fluctuations in the average prices of properties within the bounds of
United Kingdom. Several patterns have been determined which demonstrate the manner in which
the average prices of properties within UK have altered. These are discussed as follows: -
Cost of housing –
The principal pattern that is recognised to affect the average prices of houses is the cost of
housing. The prices of housing property consistently expanded during the tenure from 2009 to
2019 owing to the increment in cost of such properties. The chart appended beneath
1

demonstrates the price of property within the bounds of UK. In this regard, it has been
acknowledged that increment in price is taking place because of inflation, interest rate, pay
status, mortgage, etc. The expanding cost legitimizes the expanding prices within the bounds of
housing sector of United Kingdom (Andersen, 2020). On the basis of diagram, it can be obviated
in context of the year 2009 that the average prices of housing properties were 157,234 pound that
reach to 232,550 pounds during the year 2019. Within certain territories of UK, the prices
doubled in a time span of 10 years, i.e., from 2009 to 2019. As per this demand and supply
curve, it has been analysed that if when housing providers seem unable to respond towards rises
in price and continuously supplying more housing then supply curve rises steeply in upward
direction. This factor shows an inelastic supply response towards hike in price.
Affordability of housing – The chart shown before obviously depicts that price of
houses within the bounds of UK are inflating rapidly yet the diagram additionally demonstrates
that the adjustments in the cost increment isn't uniform similarly as with the cost increment, the
progressions of price increment likewise differentiates (Bracke, 2020). To effectively understand
this, a chart has been attached beneath: -
2