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SERC/Urban and Spatial Programme Discussion Paper
House Prices and Rents: Micro Evidence from a Matched Dataset in Central London
Philippe Bracke
February 2013
Paper No' SERCDP0127:
Full Paper (pdf)

JEL Classification: G10; R21; R31

Tags: house prices; housing rents; price index

Using the proprietary dataset of a real estate agency, I analyse tens of thousands of housing sale and rental transactions in Central London during the 2005-2011 period. I run hedonic regressions on both prices and rents and show that price-rent ratios are higher for bigger and more central units. Since this result could be driven by differences in unobserved characteristics between properties for sale and properties for rent, I replicate my analysis using only units that were both sold and rented out within 6 months, and get similar results. I discuss several possible explanations for my findings.