Housing market activity diffusion in England and Wales

This paper considers housing activity transmission across space using local indicators of spatial association. Activity does not diffuse like a ripple across England and Wales. Elevated activity appears to be associated with a south east-north west divide. The south east grows more quickly than the north west for a period of time, after which there is a switch in rank order. It is argued that changes in activity is associated with changing credit conditions to which the south east is more sensitive. Furthermore, it is proposed that activity features a type of participant induced on to the market by favourable price changes and credit conditions. It is argued that the reduced activity associated with ‘missing mortgage movers’ post-2007 reflects the lack of mortgage mover participation, which could have negative consequences for the macroeconomy.