SEASONALITY AND COINTEGRATION OF REGIONAL HOUSE PRICES IN THE UK

The data generation process underlying regional house prices in the UK is investigated using new statistical tests. It is found that causal flows tend to be northwards: the South East (rather than Greater Londo n) acts as an exogenous price determinator of the other regions in the south; the Midland regions have a great influence on prices in the no rth and flows through the East Midlands are characterised by bi-direct ional causality. These results are largely independent of assumptions made about the data generation process (and tests of these assumptions have low power in any case). There are also similarities between this causality and migration patterns, particularly in the south of Englan d.