// ******************************************************************* // PLAN (2004-01-21) // ******************************************************************* 0. What am i investigating (partly relates to what follows though as depends on what data i can get). 1. Housing market in the uk. Extensive work already done (by people at Cambridge in fact) in late 1999 and 2001 on regional behaviour on housing market. 2. Being more specific. Ideas: 1. could try to test some model of the housing market using data. (too vague - see examples below) 2. Could look at arbitrage between rental and purchase sides of market. Specifically - 1. Housing mode choices. E.g. LDV analysis of rental vs. owner-occupied housing 2. Can we estimate the same variable (e.g. user cost) from 2 different sets of data and see whether we derive same value (my guess is that we would not). This is important as user cost estimated from rental is often used in house price regressions. 3. Could do hedonic regressions (what do people pay for the size of homes, climate etc etc). NOT POSSIBLE as not enough data available in uk. 4. Test whether markets are perfect (in particular forward looking). e.g. controversy in states over Mankiw and Weil 1989. They claimed that house price rises in the 70s and early 80s were due to the baby boom coming of house-owning age. This would contradict forward looking as this rise in demand could be forecasted as far back as the 60s. Others disagree. e.g. poterba+ (that summarizes the debate and has reply by weil and shiller). He argues that changes in house prices in 80s were due (among other things) to changes in the tax system. My idea for similar stuff is to look at information announcements in the uk. Candidates are: 1. New construction projects (channel tunnel rail link). 2. Extension of tube lines in london 5. Could also consider policy changes and their affect on housing prices: 1. Introduction of mortgage tax relief (difficulty that this has been progressively phased out since the late 80s) 2. 1988 had major removal of rent controls which had been in place for over 50 years. These last two particularly attract me because we can use aggregate national data and could be easier to look at. But what am i discovering. Could use it i guess to calibrate models and also in estimation of effect of potential policies. 1. What data do i need 2. Obtain all basic data 3. Make master sheets of data (i.e. aggregate from different sources, normalize etc). 4. Analyze. // =================================================================== // What data do i need // =================================================================== Summary: Dependent Variables: * House Prices (national ok but regional preferable) (X) * Rental rates (??) Independent Variables: Demand: * Population (X - but not scotland) * GDP (national ok but regional preferable) (X) * Interest Rates (X) * Tax system Supply: * Building costs * Stock of housing (X) // ------------------------------------------------------------------- // Thoughts Qu: Am i doing cross regional comparisons or using variations across regions in some way? Ans: No. =} only need national data === R0: When did policy changes happen. E.g. mortgage tax relief. === === R1: A consistent series of uk national house price data for as long as possible. === DONE: see house_prices_1968-2003_odpm_q_by_region.xls // =================================================================== // Doing the regression // =================================================================== If i do regional then probably need to do SURE (see Camb DAE paper). // ******************************************************************* // Data (cache/data) (Sources, Description etc) // ******************************************************************* // =================================================================== // Master sets (created by RP usually // =================================================================== See own_work/master.xls!data_info for table on data. England only unless otherwise stated. 1. House Prices: Mix-adjusted UK house price index, 1968-2001. 1990=100. ISSUES: 1. based on 5% survey of building societies up to 1993. From 1993 on all mortgage lenders (notes to data) From mid 80s onwards lots of lending not thru building societies 2. is this nominal or real. NOMINAL i am pretty sure. 3. Corrections for quality changes 1. House price to income ratio and Advance to Income ratio: Source: Table 5.23 odpm_2001 1. GDP: ons. 2002 prices. (ons: BKTLAU Gross Domestic Product at market prices: CP: NSA). ISSUES: all uk or just england 1. Population. 1971-2002. ONS website ISSUES/CHANGES: 1. Linear interpolation of missing years. 1. Stock of Dwellings: 1. rp_by_hand 1971-1990 2. odpm website data. 1. Real interest rate. Bank of England Repo rate (crudely averaged) deflated by RPI annual data (excl. housing) Inflation Rate Interest Rates // =================================================================== // Relevant non-housing specific data // =================================================================== UK Retail Price Index: see economics/cache/data GDP: economics/cache/data (ONS) // ------------------------------------------------------------------- // interest rates: economics/cache/data From BofE: Mortgage lending rates (variables and 1-5 year) Problem mortgate interest data only available from 1996 onwards. // ------------------------------------------------------------------- // Population: see population/cache/data // =================================================================== // census/1991/ // =================================================================== index page and description of the topics actual directory containing the files NB: need athens username and password to log in. NB: site contains data for all censuses. The files i downloaded are all 'h' files: hc Household and Family Composition 100% ho Housing and Availability of Cars See source page for more details on individual tables. // =================================================================== // odpm // =================================================================== Office of Deputy Prime Minister. * Housing Statistics * Stock of Dwellings Index page for housing statistics 2001 Annual Report - The Only one with the all data in Excel NOT pdf Survey of English Housing // **************************************************************************** // Policy Changes // **************************************************************************** until 1981 o Substantial mortgage rationing 1981 o Corset on bank lending abolished 1983 o Building societies allowed to borrow from money markets o Mortgage Interest Relief at Source (MIRAS) introduced 1985 o Advent of centralised mortgage lenders 1986 o Building Societies Act – Bank of England administration and guidance removed and building societies become self-regulating 1988 o MIRAS restricted to one per property with a £30 000 ceiling: policy announced in August and effected in September o Community charge (“Poll tax”) introduced to replace local rates 1992 o Poll tax removed and council tax introduced 1994-2000 o MIRAS gradually withdrawn // ******************************************************************* // Scratchpad // ******************************************************************* see Here at the office of deputy prime minister for good links for data Should contact Nationwide data some going back to 1973 Halifax data going back to 1983 // -------------- // House Quality see UK census website for more info on census data. census directory: ho csv files are household information. See Here for information on the tables // ---------- // rental Only summary + bit of data + york centre generally // ---------- // misc www.demographia.com: http://www.demographia.com/dm-lonarea.htm has popln of london 1911-1991 www.nationwide.co.uk houseprices of london 1973-2001 // ******************************************************************* // Biblio // ******************************************************************* Cached: 1. cutler+_1999_jpe_the_rise_and_decline_of_the_american_ghetto.pdf 2. case+_1989_aer_the_efficiency_of_the_market_for_single-family_homes.pdf 3. kearl_1979_jpe_inflation_mortgage_and_housing.pdf 4. poterba+_1991_brookings_house_price_dynamics.pdf 4. Simultaneous Determination of House Prices and Rents in Paris: Financial and Demographic Factors Gary-Bobo, R.J. Larribeau, S. We study the simultaneous dynamics of real house prices and rents in Paris during the period 1962-1994, using a recently published set of data. Paper provided by Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor. in its series Papers with number 9627. // Have paper copy 5. Cambridge DAE report on regional house price dynamics. 6. Garratt, D. (2003) Rates of Return to Owner-Occupation in the UK Housing Market, 1969-2000, Discussion Papers in Applied Economics and Policy No. 2003/2, Department of Economics and Politics, Nottingam Trent University. 7. baddeley_2003_unpub_herding_in_the_uk_housing_market.pdf 8. Meen, G. (2002) The Time Series Behavior of House Prices: A Transatlantic Divide? Journal of Housing Economics, vol. 11 pp. 1-23. 9. Ortalo-Magne, F. and Rady, S. (2002) Tenure Choice and the Riskiness of Non-Housing Consumption, Journal of Housing Economics, 11(3), pp. 266-79.