Regional House Price Cohesion in the UK: Recent Trends and Covid

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 variety of different metrics, and use a sample which includes the covid and post-covid time periods. We find that co-movement has fluctuated greatly over 50 years, but there has not been a clear upward or downward trend in cyclical cohesion over the last five decades. However, there has been a sharp increase in co-movement after the covid pandemic. This reflects a “flattening of the gradient” found in other studies. To the extent that more targeted fiscal transfers to lower-income regions, as well as a relaxation of planning rules for new housing development may encourage greater co-movement, these policies may be worth pursuing.