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Differing house price linkages across UK regions: A multi-dimensional recursive ripple model

Author

Listed:
  • Chris Hudson

    (The Graduate Institute Geneva, Switzerland)

  • John Hudson

    (University of Bath, UK)

  • Bruce Morley

    (University of Bath, UK)

Abstract

The aim of this study is to determine the nature of the relationship between house prices of different types of housing across the UK regions. We use an Autoregressive Distributed Lag bounds testing approach to determine the long-run relationships between house prices as well as an error correction model to estimate the short-run dynamics between house prices. The data include house prices across the regions of Great Britain and for new, old and modern houses. The results suggest that house price shocks ripple across regions, although the nature of the relationship varies across housing types. We further simulate the impact of house price shocks and reveal a complex structure whereby a house price shock in region A impacts upon prices in other regions, which in turn feedback into region A in a recursive ripple.

Suggested Citation

  • Chris Hudson & John Hudson & Bruce Morley, 2018. "Differing house price linkages across UK regions: A multi-dimensional recursive ripple model," Urban Studies, Urban Studies Journal Limited, vol. 55(8), pages 1636-1654, June.
    • Handle: RePEc:sae:urbstu:v:55:y:2018:i:8:p:1636-1654
    DOI: 10.1177/0042098017700804
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    References listed on IDEAS

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    3. P. S. Morawakage & G. Earl & B. Liu & E. Roca & A. Omura, 2023. "Housing Risk and Returns in Submarkets with Spatial Dependence and Heterogeneity," The Journal of Real Estate Finance and Economics, Springer, vol. 67(4), pages 695-734, November.
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