Munich Personal RePEc Archive

Bubbles and contagion in English house prices

Fry, J. M. (2009): Bubbles and contagion in English house prices.


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Using methods originating from statistical physics we model bubbles in English house prices. It is found that there was a nationwide housing bubble 2002-2007. Typically prices were 30-40% over-valued and fell around 20%. London is atypical in that the level of over-pricing was lower, only around 20%, and experienced a drop in prices of only around 15%. There is some suggestion of contagious effects, with the bubble in London affecting prices in Yorkshire and the North.

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