Untangling the nonlinear ‘knots’ of UK’s housing prices

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dc.contributor.authorAlexiou, Constantinos
dc.contributor.authorVogiazas, Sofoklis
dc.date.accessioned2019-11-13T16:50:03Z
dc.date.available2019-11-13T16:50:03Z
dc.date.issued2019-08-29
dc.description.abstractPurpose Housing prices in the UK offer an inspiring, yet a complex and under-explored research area. The purpose of this paper is to investigate the critical factors that affect UK’s housing prices. Design/methodology/approach The authors utilize the recently developed nonlinear ARDL approach of Shin et al. (2014) over the period 1969–2016. Findings The authors find that both the long-run and short-run impact of the price-to-rent (PTR) ratio and credit-to-GDP ratio on house prices (HP) is asymmetric whilst ambiguous results are established for mortgage rates, industrial production and equities. Apart from the novel framework of analysis, this study also establishes a positive association between HP and the PTR ratio which suggests a speculative behaviour and could imply the formation of a housing bubble. Originality/value It is the first study for the UK housing market that explores the underlying fundamental relationships by looking at nonlinearities hence, allowing HP to be tied by asymmetric relationships in the long as well as in the short run. Modelling the inherent nonlinearities enhances significantly the understanding of UK housing market which can prove useful for policymaking and forecasting purposes.en_UK
dc.identifier.citationAlexiou C, Vogiazas S. (2019) Untangling the nonlinear ‘knots’ of UK’s housing prices. Journal of Economic Studies, Volume 46, Issue 5, pp. 1083-1103en_UK
dc.identifier.issn0144-3585
dc.identifier.urihttps://doi.org/10.1108/JES-06-2018-0222
dc.identifier.urihttp://dspace.lib.cranfield.ac.uk/handle/1826/14728
dc.language.isoenen_UK
dc.publisherEmeralden_UK
dc.rightsAttribution-NonCommercial 4.0 International*
dc.rights.urihttp://creativecommons.org/licenses/by-nc/4.0/*
dc.subjectUKen_UK
dc.subjectHousing pricesen_UK
dc.subjectNonlinear autoregressive distributed lagen_UK
dc.titleUntangling the nonlinear ‘knots’ of UK’s housing pricesen_UK
dc.typeArticleen_UK

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