Regional House Price Cohesion in the UK: Recent Trends and Covid
25 Pages Posted: 11 Jan 2024
Date Written: January 8, 2024
Co-movement of house prices across geographical markets (or a lack of such co-movement) has implications for labour mobility and the effectiveness of monetary and other national policies. Previous research on home value co-movement across the UK has yielded mixed findings. In this study we employ a newer filtering method that has yet to be applied to the issue and use a sample which covers the covid and post-covid time periods. We find a decrease in cyclical co-movement over recent decades that is much more pronounced than that found using previous methods. This low level of cohesion may reflect the much-discussed divergence across the regional economies of the UK. We also find that by the most complete measure co-movement was even lower during and after covid than before the pandemic. This may be due to a reversal of previous price patterns-house prices in London, which usually grow faster than those in other regions grew more slowly than most others since covid. At the same time, slower-growing areas like Wales and Northern Ireland grew much faster than usual. This reflects a “flattening of the gradient” between expensive and cheaper housing markets which has been found in some US regions and may be related to the work-from-home (WFH) phenomenon.
Keywords: Regional Housing Markets, House Price Cohesion, Covid
JEL Classification: R1, R31
Suggested Citation: Suggested Citation