SPECULATION IN THE HOUSING-MARKET

This paper presents and tests a model of house price speculation. The mechanisms by which price speculation may occur in the housing market are described and formalised, A model of house prices is constructed t hat allows for speculation, Aspects of this model are tested using tim e-series data for the UK and the Greater London area (1969-95). Overal l, the analysis presents some evidence of the process of speculation a s a possible determinant of house prices in the London and UK-wide hou sing markets.