Are mortgage lenders guilty of the housing bubble? A UK perspective

Existing theoretical models of house prices and credit rely on continuous rationality of consumers, an assumption that has been frequently questioned in recent years. Meanwhile, empirical investigations of the relationship between prices and credit are often based on national-level data, which is then tested for structural breaks and asymmetric responses, usually with subsamples. Earlier author argues that local markets are structurally different from one another and so the coefficients of any estimated housing market model should vary from region to region. We investigate differences in the price–credit relationship for 12 regions of the UK. Markov-switching is introduced to capture asymmetric market behaviours and turning points. Results show that credit abundance had a large impact on house prices in Greater London and nearby regions alongside a strong positive feedback effect from past house price movements. This impact is even larger in Greater London and the South East of England when house prices are falling, which are the only instances where the credit effect is more prominent than the positive feedback effect. A strong positive feedback effect from past lending activity is also present in the loan dynamics. Furthermore, bubble probabilities extracted using a discrete Kalman filter neatly capture market turning points.

Effects of rain shelter or simulated rain during grain filling and maturation on subsequent wheat grain quality in the UK

The effects of simulated additional rain (ear wetting, 25 mm) or of rain shelter imposed at different periods after anthesis on grain quality at maturity and the dynamics of grain filling and desiccation were investigated in UK field-grown crops of wheat (Triticum aestivum L., cvar Tybalt) in 2011 and in 2012 when June–August rainfall was 255.0 and 214.6 mm, respectively, and above the decadal mean (157.4 mm). Grain filling and desiccation were quantified well by broken-stick regressions and Gompertz curves, respectively. Rain shelter for 56 (2011) or 70 d (2012) after anthesis, and to a lesser extent during late maturation only, resulted in more rapid desiccation and hence progress to harvest maturity whereas ear wetting had negligible effects, even when applied four times. Grain-filling duration was also affected as above in 2011, but with no significant effect in 2012. In both years, there were strong positive associations between final grain dry weight and duration of filling. The treatments affected all grain quality traits in 2011: nitrogen (N) and sulphur (S) concentrations, N:S ratio, sodium dodecyl sulphate (SDS) sedimentation volume, Hagberg Falling Number (HFN), and the incidence of blackpoint. Only N concentration and blackpoint were affected significantly by treatments in 2012. Rain shelter throughout grain filling reduced N concentration, whereas rain shelter reduced the incidence of blackpoint and ear wetting increased it. In 2011, rain shelter throughout reduced S concentration, increased N:S ratio and reduced SDS. Treatment effects on HFN were not consistent within or between years. Nevertheless, a comparison between the extreme treatment means in 2012 indicated damage from late rain combined with ear wetting resulted in a reduction of c. 0.7 s in HFN/mm August rainfall, whilst that between samples taken immediately after ear wetting at harvest maturity or 7 d later suggested recovery from damage to HFN upon re-drying in planta. Hence, the incidence of blackpoint was the only grain quality trait affected consistently by the diverse treatments. The remaining aspects of grain quality were comparatively resilient to rain incident upon developing and maturing ears of cvar Tybalt. No consistent temporal patterns of sensitivity to shelter or ear wetting were detected for any aspect of grain quality.