Kenneth Gibb

Submarket Dynamics of Time to Sale

We argue that the rush to apply multiple regression estimation to time on the market (TOM) durations may have led to important details and idiosyncrasies in local housing market dynamics being overlooked. What is needed is a more careful examination of the fundamental properties of time to sale data. The approach promoted and presented here, therefore, is to provide an examination of housing sale dynamics using a step-by-step approach. We present three hypotheses about TOM: (i) there is nonmonotonic duration dependence in the hazard of sale, (ii) the hazard curve will vary both over time and across intra-urban areas providing evidence of the existence of submarkets and (iii) institutional idiosyncrasies can have a profound effect on the shape and position of the hazard curve. We apply life tables, kernel-smoothed hazard functions and likelihood ratio tests for homogeneity to a large Scottish data set to investigate these hypotheses. Our findings have important implications for TOM analysis.

Urban regeneration and property investment performance

Investors need to have confidence in the maturity of the market in terms of transparency of returns and risks. Information on property returns is normally available for prime markets whereas urban regeneration locations to varying degrees are characterized by an opaque rather than a transparent market, inadequate information on returns and risks, barriers to the availability of finance and uncertainty regarding the liquidity of assets. This paper presents findings of an empirical investigation into the development of a total returns index designed to measure investment performance of property in regeneration areas. Results show that over the long-term returns for regeneration property exceed national and local benchmarks. This finding has important policy considerations for regeneration and messages for the property investment sector.

Uncertainty, Expectations and Behavioural Aspects of Housing Market Choices

Abstract Housing is a complex commodity and housing market choices carry with them substantial economic and social consequences for the households making them. Housing market decisions are complex, uncertain and involve expectations-formation. This paper argues that the standard economic theory of decision-making under uncertainty – expected utility theory – is particularly ill-suited as the basis for understanding such complexity. The paper then explores alternative avenues for potential development, reviewing the key characteristics of owner-occupied housing markets and housing search, and examining how the resources of institutional and behavioural economics could be used to inform our understanding of the residential mobility process. The paper concludes by outlining an agenda for empirical research.

Housing economics and public policy

Introduction Urban housing models Segmentation, adjustment and disequilibrium Transactions costs and housing markets Hedonic pricing models:a selective and applied review Housing, random walks, complexity and the macroeconomy Taxation, subsidies and housing markets The economics of social housing Neighbourhood dynamics and housing markets Access to home ownership in the United States:the impact of changing perspectives on constraints to tenure choice Planning regulation and housing supply in a market system Economics and housing planning The right to buy in Britain The political economy of housing research Policy and academia:an assessment

Trends and Change in Social Housing Finance and Provision within the European Union

Despite the advent of European integration, the European Union exhibits considerable diversity in its social and economic arrangements in a number of important spheres, not least housing. EU national housing systems differ markedly and interact with national economic structures, welfare regimes, social trends and policy agendas. This paper focuses on the social rented sector and its financing. It maps out trends and sources of change, divergence and convergence across selected EU nations. The paper draws heavily on the UK experience and from secondary sources from other EU nations. The paper begins (after the introduction) with a brief critical description of the main ways social housing is organised in the EU. This is followed by an overview of social housing finance, public spending and subsidy mechanisms. The next section sets out some of the key challenges consequently facing the non-market sectors across the EU. The concluding discussion raises issues for further inquiry.

Transferring Glasgow's council housing: financial, urban and housing policy implications

Glasgow has a large council sector characterized by a range of problems associated with low-income tenants, disrepair, insufficient resources and high levels of housing debt. Reluctantly, the council has come to the view that stock transfer, ultimately to local community-based housing organizations, is the preferred way to address its housing problems. Stock transfer concerns the privately funded sale of social housing as a going concern from one social landlord to another. This has been an important way of re-financing existing social housing in the UK for more than a decade. However, the Glasgow transfer is complex, large (with more than 80,000 units transferring) and politically controversial. The success or otherwise of Glasgow’s transfer has implications for the future of the stock owned by other councils in Scotland. The paper, therefore, is concerned with the wider context of transfer, the financial and economic arguments to do with Glasgow’s stock transfer, and the wider implications of the transfer.

Area Deprivation in Scotland: A New Assessment

This paper gives an account of an attempt to create a new area deprivation index for Scotland based mainly upon non-census indicators and calibrated at the spatial level of the postcode sector. This is the first such index to be produced in the UK. The paper explains why there is currently more interest in this type of index, describes how the index was constructed from identification of deprivation domains through selection of indicators to their standardisation, transformation and combination into a single measure. A multidimensional account of the resulting geographical pattern of deprivation is given. There then follows a discussion of various issues surrounding the index and areas for further development or improvement are identified.

A housing allowance for the UK? Preconditions for an income‐related housing subsidy

Abstract This paper complements the policy focus of Kemp (1994) who addresses the options for housing benefit reform in the UK. By using as general a framework as possible to consider the basic choices, it is apparent that a move to an ex ante form of allowance, can, under most circumstances, be considered to be beneficial—provided that complementary policies evolve alongside changes to personal housing subsidies. It is also clear that levels of support, the degree of progressivity and of targeting cannot be fully answered with theorising by economists. There are fundamental issues concerning just at what level adequate social security provision should be in a modern economy. Personal housing subsidies are vital to low‐income housing consumption and are the core of the UKs housing finance system. It is all the more important, therefore, that the vast resources spent on housing allowances are on schemes which are generally considered efficient and fair.

Towards the More Effective Use of Housing Finance and Subsidy

The UK provides an important case study of both the potential for restructuring traditional housing finance systems and the outcome of such restructuring. During the period 1975–2000 the UK government undertook a piece-by-piece restructuring of housing finance. The major objectives of this restructuring included bringing public expenditure under control, ensuring that a high proportion of housing costs were paid by the direct beneficiaries and targeting available subsidy more directly on those in housing need. This agenda was supported by more general policies of liberalisation and privatisation, and particularly by the growth in asset values during the 1970s and 1980s and by macro-economic stabilisation during the 1990s. Based on the desktop analysis undertaken for the Evaluation of English Housing Policy Review this paper takes four specific policies and clarifies how political priorities and the economic environment came together to make policy change possible. It then evaluates the outcomes of these policies both in terms of their immediate goals and the more general objectives of housing policy. The incremental approach favoured by the government appears to have been successful in its own terms, but the result is far from a coherent and sustainable housing finance policy. The conclusions stress more general lessons some of which have implications for effective restructuring in other countries.

Transfers, contracts and regulation: a new institutional economics perspective on the changing provision of social housing in Britain

Social housing policy in the UK mirrors wider processes associated with shifts in broad welfare regimes. Social housing has moved from dominance by state housing provision to the funding of new investment through voluntary sector housing associations to what is now a greater focus on the regulation and private financing of these not-for-profit bodies. If these trends run their course, we are likely to see a range of not-for-profit bodies providing non-market housing in a highly regulated quasi-market. This paper examines these issues through the lens of new institutional economics, which it is believed can provide important insights into the fundamental contractual and regulatory relationships that are coming to dominate social housing from the perspective of the key actors in the sector (not-for-profit housing organisations, their tenants, private lenders and the regulatory state). The paper draws on evidence recently collected from a study evaluating more than 100 stock transfer organisations that inherited ex-public housing in Scotland, including 12 detailed case studies. The paper concludes that social housing stakeholders need to be aware of the risks (and their management) faced across the sector and that the state needs to have clear objectives for social housing and coherent policy instruments to achieve those ends.