Are prices of New dwellings different? : a spectral analysis of UK property vintages

The work makes two contributions to the literature on dynamic house prices. First, a house price ripple in cycles from Modern to Older dwellings is revealed and, second, as New housing is shown to have lower volatility than the other two. Using spectral analysis, it is argued that there is a 7 1/2;-year repeat buyer-secondhand cycle and a five year, first time buyer-New housing cycle, common to three house price vintages. These cycles reinforce each other every 15 years, which corresponds with a Minsky super-cycle in housing finance. The equity of the owner- occupier is fortified by higher house prices whereas New builds extract embedded equity from the market. Through programmes like Help-to-Buy 1, Government should support builders and facilitate market access to FTBs. However, to address the greater price instability that should follow, Government should impose a capital gains tax on the house seller.