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Has COVID-19 Led to Shifts in Urban Spatial Equilibrium? Evidence from Housing Markets across England and Wales

Author

Listed:
  • Xiaodan Liu
  • Anupam Nanda
  • Sotirios Thanos

Abstract

The COVID-19 pandemic and resultant shift to work-from-home fundamentally reshaped the spatial distribution of house prices across England and Wales. Using panel data at the neighbourhood level from 2014 to 2022, two key dimensions of this transformation are identified: the devaluation of job-dense areas and the flattening of residential price gradients to urban centres. Two-way fixed-effects models demonstrate that each 1% increase in the job density ratio corresponded with a 0.0165% increase in house prices pre-pandemic, but this price premium decreased by 81% during COVID. The price gradient between central locations and outlying areas flattened significantly, with the distance coefficient almost doubling in 2020 compared to 2019. The persistence of these effects through 2022 suggests a structural reorganisation of residential preferences rather than a temporary shock. The findings provide robust evidence of shifting spatial equilibrium across England and Wales, carrying significant implications for regional development, transportation infrastructure, and commercial real estate markets as both urban and rural areas adapt to more flexible working arrangements.

Suggested Citation

  • Xiaodan Liu & Anupam Nanda & Sotirios Thanos, 2025. "Has COVID-19 Led to Shifts in Urban Spatial Equilibrium? Evidence from Housing Markets across England and Wales," ERES eres2025_271, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2025_271
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    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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