A dramatic fall in the annual rent to house price ratio and long real interest rates during a period of relatively static real rents in the UK suggests that the stream of future imputed rents became discounted at successively lower interest rates from 1995 onwards. This paper argues that the...

We develop a theoretical model of house market disequilibrium. Price and quantity adjustments occur as the consequence of inventory adjustment in the absence of a market maker. This approach reveals a process of dynamic adjustment whereby sellers alter their reservation prices in response to...