Outer South East

Regional Composition

Adur, Arun, Ashford, Aylesbury Vale, Basingstoke and Deane, Bedford, Braintree, Brighton and Hove, Canterbury, Central Bedfordshire, Cherwell, Chichester, Colchester, Dover, East Hampshire, Eastbourne, Eastleigh, Fareham, Gosport, Hastings, Havant, Isle of Wight, Lewes, Maldon, Milton Keynes, New Forest, Oxford, Portsmouth, Rother, Shepway, South Oxfordshire, Southampton, Swale, Tendring, Test Valley, Thanet, Uttlesford, Vale of White Horse, Wealden, West Berkshire, West Oxfordshire, Winchester, Worthing


Forecasts

Real House Price Growth Rate*     

NOTE: The table reports actual and predicted annual log real house price growth rates. The forecasts are shown in blue. Predictions are for 1,2,3 and 4 quarters ahead. The reported predictions are computed as the average of forecasts generated by a battery of forecasting models, including Dynamic Model Averaging (DMA) and Dynamic Model Selection (DMS), Time-Varying Parameters (TVP) model, Bayesian VAR (BVAR) and the mean combination of individual Autoregressive Distributed Lag Model (ARDL) forecasts. Please refer to the Previous Releases and Data section for detailed results of the individual model forecasts. For further details about the methodology see Yusupova A., 2016. "An Econometric Analysis of U.K. Regional Real Estate Markets".


Financial Stability

Real House Price Index

Current status (Q3 2017): The regional real house price index grew at 1.5% over the last 12 months.

Exuberance: Note in the graph below that the statistic (BSADF) employed to determine whether real house prices are in an exuberant phase is below the explosive threshold, i.e. no exuberance.

Probability of exuberance: The probability of entering in an exuberant phase within the next quarter is 0.04% (see Pavlidis E.G. et al., 2016 for the description of the methodology and Yusupova et al., 2017 for the data details).

Real House Price Index

Real House Price Index

Backward Supremum Augmented Dickey Fuller (BSADF) Statistics employed to determine whether regional real house prices are in an exuberant phase and Critical Values

BSADF and Critical Values

 


Price-to-Income Ratio

Current status (Q3 2017): The regional real house price to real personal disposable income ratio is currently at 3.86.

Exuberance: Note in the graph below that the statistic (BSADF) employed to determine whether the ratio of Real House Price to Real Personal Disposable Income is in an exuberant phase is below the explosive threshold, i.e. no exuberance.

Probability of exuberance: The probability of entering in an exuberant phase within the next quarter is 0.32% (see Pavlidis E.G. et al., 2016 for the description of the methodology and Yusupova et al., 2017 for the data details).

Ratio of Real House Price to Real Personal Disposable Income

Ratio of RHPI to RPDI

Backward Supremum Augmented Dickey Fuller (BSADF) Statistics employed to determine whether the ratio of Real House Price to Real Personal Disposable Income is in an exuberant phase and Critical Values

Ratio of RHPI to RPDI: BSADF and Critical Values

NOTE: Shaded areas indicate identified periods of exuberance (statistic is above the critical value). The BSADF series are reported for the lag length of one. The graphs for different lag lengths are available in the document Outer South East.pdf. The series of BSADF and critical values are available for download in the Previous Releases and Data section.

 

 

* Disclaimer

Although the Contents contained herein are provided under the highest professional standards in the generation of these forecasts, the UK Housing Observatory does not guarantee the accuracy or completeness of any information contained herein. The UK Housing Observatory specifically disclaims all warranties, expressed or implied, with respect to the use of this information or any results with respect thereto. In addition, the information contained herein shall in no way be construed to constitute a recommendation by the UK Housing Observatory with respect to the purchase or sale of any investment, security or its derivatives.