UK Housing Market: Analysis of Trends, Determinants, and Impacts

This report provides a comprehensive analysis of the UK housing market between 2009 and 2019. It examines the changes in average house prices over this period, exploring the economic determinants that influenced these trends, including factors such as economic growth, interest rates, and consumer confidence. The report also investigates the impact of government policies and actions on the housing market, such as changes in taxation and regulations. Furthermore, it assesses the potential impact of the COVID-19 pandemic on the UK housing market, considering factors such as shifts in demand, supply chain disruptions, and economic uncertainty. The analysis incorporates various data sources, including UK House Price Index data and governmental reports, to provide a detailed overview of the market's dynamics and future outlook.

Contemporary Business Environment

ABSTRACT
This report has been developed to analyse the knowledge regarding changes in housing
market UK since 2009. Mainly in this report Demand and Supply in the Housing market has
been analysed in the report. In which demand in the housing market and change in the prices has
been analysed since 2009. Different changes of the housing market has been considered in
report. The changes in housing price in last decade has been studied on base of factor that has
affected the prices of houses in United Kingdom. Impact of those influencing factors has been
analysed for the housing sector organizations. The impact of Corona or Covid-19 on housing
sector has been studied to understand the changes for housing market in country.

Contents
ABSTRACT....................................................................................................................................2
INTRODUCTION...........................................................................................................................4
Change Average Pries of Houses in United Kingdom from 2009 to 2019.................................4
Changes that are Outlined Regarding Variation in Price of Houses from 2009 to 2019.............6
How the Government Decisions has affected in the Prices of House in Duration of 2009 to
2019.............................................................................................................................................8
Impact of Covid 19 on Housing Market of United Kingdom in Year 2019................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Housing market is considered as processes and activities that includes supply and demand
for housing, house prices, and mortgage. The conditions of housing market are not constant in all
conditions. The prices of the housing market is highly depended on the economic condition at
national and international level. The prices of the housing and real estate market. Various
changes in the housing market will be analysed in report (Best and Kleven,2018). The average
prices of housing market since 2009 to 2019 will be analysed in report. Various changes in the
housing price in period of 2009 to 2019 will be discussed in report. The impact of various
government decision on real estate market will be studied in report. Impact of Covid-19 on
housing price will be analysed in report.
Change Average Pries of Houses in United Kingdom from 2009 to 2019
As per the condition of the economical in last ten years are not constant. It has
continuously affected the prices in housing market. The change in the price of the project is not
constant because with time. The increment in the prices of the house price is more than the
increment in the income of people. it has made the buying process of house more difficult for
people who are first time buyer. This rise in price of the house price is more difficult for the
buyers to buy houses. In the end of year 2019 in UK earning of the hosing was about 5 which is
less than 5 4 in year 2007 and it is more than 4.4 ratio of the year 2009 (Hwang, Cho and Shin,
2019). This can be considered as positive sign for marketing market till year 2019. The
difference between or rift between the costly product and cheaper product has been analysed in
last 10 years. London is most expensive place in Europe in field of housing market. The ratio
between the cost of houses a d income of people has risen to new levels. In year 2016 this ratio
was around 10.2 which was 6.1 than it was improved with minor improvement it was up to 8.8.
In year 2019 minimum ratio was observed in Scotland. Which is considerably up to 3.3 less as
compared to north. The poor condition of growth can be considered to evaluate or predict the
market conditions but for this process year 2010 was considered as exception. After growth of 33
% this is difficult to maintain the affordability of the houses that are available in the UK location.
In this conditions the accessibility of the homes is difficult for all people. After Brexit was
considered by United Kingdom stability in the inflation rate is quite different to understand. This
stability was more effective in London and south east part of United Kingdom. In initial months

of 2010 the growth and development has observed in London was not constant and long lasting
this was varying but it could be kept constant by taking several actions by government after year
2016 it is continuous declining. The HPI of London is still 8.8. For the majority households this
is a bigger problem. Due to the high prices it is big trouble to the first time buyer. Main trouble
that is faced by the first time buyer is about the high cost of the homes that are available in UK
housing market. With less amount of savings this is highly difficult for the first time buyers to
make such investment in housing market. The current income is considered as 20 % value which
was about 88 % before 10 years. First time buyers and people who are interested in buying home
in UK had started various money saving process to buy their new home. In the housing market
there is more pressure in locations like London where the cost or pricing of the homes is much
higher than other locations in UK.
Figure 1Housing Cost 2005-19
(Source: UK House Price Index: June, 2019)
People with average have to wait for 15 years to buy new home in London. For the first time
buyer the process of buying new house is much easier and short process and bonds that are
signed are much shorter and easier for the first time buyers in UK (Benbouzid, Mallick and
Pilbeam, 2018). These are many reasoned behind these changes in the prices of housing market
since 2009. These reasons are related to the change in the economic condition of country.

Figure 2 Trends in expenditure
(Source: Demand for Grants 2020-21 Analysis : Housing and Urban Affairs.
2020)
Housing market is mainly affected by the decisions and policies that are implemented by the
government that can affect the housing market. since 2009 nominal cost of house in London has
increased year on year with rate of 7.8 % compared to England and wales which is 2.6 %. The
price of houses in housing market has rose up to 33 % in last 10 years. Which is completely
different from last decade from 1990 which was 21 %. The cost in housing market has risen
much faster since 2009 in London and other areas of the country. The main reason of change in
the pricing in the housing sector is related to changes in various aspects that are related to the
housing market. Some of the main reasons that can be considered for the change in the price in
the housing market are- population of the location, change in the income of people, price of the
products that are used in the housing sector and preferences of people. These are main reason of
changes in the price of housing sector.
Changes that are Outlined Regarding Variation in Price of Houses from 2009 to 2019
There are different things has been changes in last decade. These changes are based on
the decisions of government and various changes in economy of country. The rice of houses in
the housing market is directly related to the economy of country. There are various things are
need to be considered in order to understand the changes that are occurred in the housing sector
of the UK, most of changes that are occurred in UK housing market are related to the pricing of
the houses and other is related to the process or bounding processes that are included in the
house selling process. There are many organizations are considering that UK housing market has
faced major set back in last 10 years. Various things in United Kingdom has affected the housing

market. These changes are important to consider for the housing market to get better overview of
conditions that are changed in UK housing market (Tsai and Tsai, 2018). The major impact on
market conditions has been based on situation of the Brexit. This is considered as major setback
for the housing and complete other market in UK. Due to Brexit there is major changes has been
occurred in UK that are leading the price change in UK market for housing sector. This is result
of uncertainty in economical condition of UK. This is considered as weakest point in the housing
sector in UK. There is big uncertainty in UK market due to Brexit. Most of the buyers in UK
housing market are the local or international investors. Brexit has mainly affected the investors
who are present in UK and international market. This uncertain condition can affect the economy
of UK and this factor has the investors and buyer to reconsider thought of making investment in
the housing sector. People are afraid of making investment in UK market cause of risk or fear of
major hit on economy due to the exit of the UK from European Union. It has mainly affect the
price of the housing market in last few years. There are some other factors there which also have
impact on UK housing market. Due to the economic growth rate of UK has faced some issues it
has affected the housing market in the country. Negative or instable economic situations has
forced the buyers and other people who are associated to the UK housing market. People are
facing issues with their savings and prices of the houses has faced major jump in last 10 years.
There are different issues are there that has affected the economic stability in country. The prices
of housing has increased since last few years. from 1990 to 2000 the increment in the prices in
the housing market was about 21 % which was completely different from the last decade
(Munro,2018). The increment in the price of the housing sector has shown the increment of 33 %
in last 10 years which is larger change from the decade of 1990 to 2000.

Figure 3Housing Cost
(Source: No-deal Brexit 'could hit house prices, 2019.)
Factors like unemployment also has affected the housing market. It has rose the issues with the
per capital income of the people which had affect the capability of people for buying house in
Locations like London and other close places. Saving of the people are too low due to inflation
and unemployment which has made people unable to make investment in real estate market. The
prices of houses in London are too high from other locations in the country. The reason behind
this difference in the price difference in London and other location is mainly due to the
importance of London on global level as economic hub. In European London is economic capital
for investors and other businesses. It has increased the interest of investors in London Housing
market. It has mainly affected the price of houses in European market. There are some other
factors are there Which has affected the UK housing market (Jones,2016). These factor are
related to the interest rates in UK economical market. There is continuous phase of interest rates
changes has been observed in last decade.it has affect the housing market or real estate market in
United Kingdom. Due to steep increment in the interest rates there is a quick fall in the prices of
the houses has been recorded in the UK housing market. consumer confidence is also a major
factor that is needed to be considered to analyse the changes that are occurred in UK housing
market. due the challenges of the Brexit people are less confident in making decisions that are
related to making investment in UK market and specially in London region. People of the

country are highly uncertain in making investment in housing sector. They are waiting for crucial
changes in the prices of the housing market due to various factors that had made the housing
market so unstable. Brexit is one of these major factor that can be considered for affecting the
housing market in UK. The banking sector is also important for the housing sector. Loans that
are provided by the banks are crucial for organization who deals in housing market. Interest rates
that are considered as factor that has affected the conditions in Housing market of UK. As per a
study there it is found that there were around 700000 new houses build in UK from year 1996 to
2007. This high level of house building has affected the housing market in UK in next decade of
2009 to 2019 in which people have shown less interest in buying houses (Lowe,2017). There are
different reasons can be considered for the less interest of people in housing market. Some of
major factor that can be considered in this processes are interest rates in country, Economic
uncertainty in UK, increase of 33 % in prices of houses in range of 2009 to 2019. These are some
major reason that has affected the stability of houses in last few years. this is how various
changes has faced by UK housing market in last few years.
Population- With the increment in population is directly related to the increment in the demand
of house in locality. Higher demand of houses can tends to the increment in the housing market.
with increase of population price of the houses can be increased.
Income Rise- This is main aspect that is need to be considered by organization. This factor is
related to the ratio between the housing cost and increase in the income of the people. Rise in the
income can increase the affordability of houses. High affordability can increase the ability of
people to buy houses in UK.
Price of the Substitute Products- Price of the houses also depends on the price of components
that are used in the housing market. If the price of these components is high then it can cause
increase in the price of houses in UK housing market.
Preferences- This is completely related to the requirement of the customers. The selection or
demand of the customer can lead to change in the prices in housing sector. This is how
preferences of customer can affect the price in housing market.
Number of Supplier- If the number of supplier in the housing market are low than it can tends to
increase in the price in housing sector due to poor supply process.

Technology- Technology can cause both positive and negative impact on the housing market. it
can reduce the cost of houses by providing better technologies in production process and it can
increase the price of houses due to cost of technology that is implemented in the production
process.
Figure 4 Housing Supply and Demand
(Source: Housing Supply and Demand, 2020)
How the Government Decisions has affected in the Prices of House in Duration of 2009 to 2019
There are different decisions have been taken by the UK government that are related to
the housing market which has affected the prices of houses in the Housing or real sector market.
UK government has faced back to back challenges that re related to the administrative,

economical and government level. Among all these cases Brexit is major decision that has
affected the housing market mainly (Nicolai, F., Pelosi, M. and Risteska, S.,2019). There are
different challenges are faced by the UK market that are related to the cost of houses in real
estate market. There is major fall has recorded after year 2009 in the house sold in UK. It also
has affected the fall in the prices of the houses. This is based on the ratio of differences in the
income of people and prices of houses. The prices of house in UK have shown an increment in
last 10 years with percentage of 33. This is 12 % more than the previous decade. This is
important to consider various decisions like Brexit to known the impact on the housing sector of
the country. Increase in the interest on the housing loan can increase the load on the customer.
Change in the interest can increase the cost of houses in market place. Changes that are
implemented in the legal process also can increase the cost of houses in UK housing market.
The increment in the prices of the house price is more than the increment in the income
of people. It has made the buying process of house more difficult for people who are first time
buyer. This rise in price of the house price is more difficult for the buyers to buy houses. In the
end of year 2019 in UK earning of the hosing was about 5 which is less than 5 4 in year 2007 and
it is more than 4.4 ratio of the year 2009 (Hwang, Cho and Shin,2019). This can be considered as
positive sign for marketing market till year 2019. The difference between or rift between the
costly product and cheaper product has been analysed in last 10 years. London is most expensive
place in Europe in field of housing market. The ratio between the cost of houses a d income of
people has risen to new levels. In year 2016 this ratio was around 10.2 which was 6.1 than it was
improved with minor improvement it was up to 8.8. In year 2019 minimum ratio was observed in
Scotland. Which is considerably up to 3.3 less as compared to north. Housing market also
providing various facilities by providing better conditions to the first time buyer by providing
compensation to the customer in Stump Duty and taxation rate.
Impact of Covid-19 on Housing Market of United Kingdom in Year 2019
There is huge impact of Covid-19 on UK housing market. Since this pandemic there are
various changes are need to be implemented in the housing market. This change are mainly
related to the lifestyle of people in country due to the pandemic situation (Bramley and
Fitzpatrick,2018). Service providers in the housing market are forces by the customer to make
changes in the design of the houses to provide better housing service to them. Various facilities

are now needed to the add in houses design to avoid the further pandemic that is infectious.
There are various considerations are needed to be made by the organizations that are providing
housing services to the people who want to buy houses in different part of the country. During
the pandemic situation whole country was under lockdown which is a disaster situation for
housing market people were willing to buy new houses but Covid-19 has strongly affected the
UK market including the housing market. This is tragedy has strongly affected the housing
market (Sá,2016). Due to various changes in the perception house designers have to implement
various changes that might can increase the price of houses in country. During the lockdown
condition housing market has faced strong fall in market place. There were less number of
buyers in lockdown condition. It has strongly affected the real estate market. It is predicted that it
will back to track as lockdown condition putting down by the government. Many real estate
experts have suggested that there will be a certain fall in the prices of the houses but the homes
will remain unaffordable for people. This pandemic have different impact on the housing market.
The impact of Covid-19 can be classified in three different categories which are- short term
(Armstrong, 2016). Medium term and long term. The short-term impact of Covid-19 is directly
on the buying behaviour of the customers. The behaviours of the customers is predicted to be
changes in requirements. This changes in requirements will be regarding the precautions that are
needed to be made in order to prevent the infection of the diseases like Covid-19 in future. This
impact is related to the designs of homes that are designed by the housing facilities. Other impact
of pandemic on the cost or price of the outing market. it has been observed that there will be big
fall in the price of the houses because this pandemic has affected complete real estate market
along with the construction market. This is how real estate market have faced major pull back
due to these pandemic. The medium term impact of the pandemic is based on the improvement
of the processes that can be used by the housing sector organization to attract people who are
interested to buy house in country. After the Lockdown conditions housing sector organizations
have to implement various changes in their business process to make deal with customers. This
will change all the current processes and methods that are used by the organization to perform
business on different levels. The cost of houses will fall along with the fall in the rants that is
paid by the tenants to the landlords. This is how Covid-19 has affected the housing market in
medium term. Unemployment is also considered as major issue that can occur in housing market.