Spatial analysis of regional residential markets in England and Wales

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Gostautas, I, 2017. Spatial analysis of regional residential markets in England and Wales. PhD, Nottingham Trent University.

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Abstract

Purpose – This study examines house price returns and volatilities of the returns in residential markets in England and Wales at a county/unitary authority level for the period from 1997 to 2014. Main driving factors of the returns and volatilities are indicated. Additionally, by using spatial econometrics, we show the existing spatial structure of the returns and volatilities.

Design/methodology/approach – The study employs a variety of data from the demand and supply side of property markets to help explain differences in returns and return deviations among unitary authorities and counties. The data is constructed in cross sections. Descriptive statistics, linear regression models, spatial diagnostics, and spatial regressions are applied to assess the significance and magnitude of the coefficients in order to describe return and return risk distribution across the markets. Additionally, direct and indirect spatial impacts are calculated to enrich the interpretation.

Findings – The results demonstrate that returns and volatilities of the returns have a negative correlation, which is unconventional according to the Modern portfolio theory (Markowitz, 1952). Housing volatility is negatively related with factors that usually suggest stronger economic and property market environment; for example, employment or population. Additionally, average house price level in the area is a significant factor that influences house price returns and volatility. Finally, strong evidence for the spatial structure of returns and return deviations in the property market are displayed.

Practical implications – The study is important for understanding residential property markets. It may help in an investment decision-making process. Additionally, examination of the return deviations in property markets suggests that standard deviation may be an appropriate risk measure, however, it cannot be considered according to a traditional risk return trade off concept, which could be affected by other risk factors that play more significant roles in UK housing markets. In addition, the study questions the trustworthiness of the data and the possibility of research at this disaggregation level.

Originality/value – Few studies investigate the driving factors behind house price returns and returns volatilities in residential market at county/unitary authority level.

Item Type:	Thesis
Creators:	Gostautas, I.
Date:	April 2017
Rights:	This work is the intellectual property of the author. You may copy up to 5% of this work for private study, or personal, non-commercial research. Any re-use of the information contained within this document should be fully referenced, quoting the author, title, university, degree level and pagination. Queries or requests for any other use, or if a more substantial copy is required, should be directed to the owner(s) of the Intellectual Property Rights.
Divisions:	Schools > School of Architecture, Design and the Built Environment
Record created by:	Linda Sullivan
Date Added:	22 Sep 2017 08:19
Last Modified:	23 Aug 2021 09:48
URI:	https://irep.ntu.ac.uk/id/eprint/31661