Measuring the Demand for Housing at Local and Neighbourhood Level

Until relatively recently, housing transaction data were generally unavailable at the unit level in the UK. Partly as a result of this, the development of local indicators of housing demand has generally not kept pace with availability of indices at national and regional levels. The housing market literature is dominated by models of the national and regional housing market. In June 2000, HM Land Registry restored transaction price data to the publicly available registers and from 2005 these data became generally available to the public and the research community. This paper makes use of HM Land Registry data to contribute to the gap in the availability of housing market data at the local and neighbourhood level. Significantly, the paper also compares the results of several different approaches to modelling and estimating demand for housing including hedonic index construction, behavioural modelling and spatial interaction modelling. The analysis draws on a uniquely large and detailed dataset including information on unit level housing transaction prices, characteristics and neighbourhood descriptors drawn from the 2001 Census.