Bricks and sustainability: a look at how environmental variables impact housing markets

Abstract

Purpose

This paper aims to assess the interaction between environmental challenges and policy interventions in shaping housing prices. It emphasises the need to understand how policy interventions and environmental conditions can disproportionately affect housing affordability, population growth and building density, especially for vulnerable communities.

Design/methodology/approach

The study uses a panel quantile ARDL regression model to thoroughly investigate the asymmetric impact on a sample of 16 UK cities spanning the period 2000–2023.

Findings

The study reveals that pollution significantly impacts house prices, with cleaner areas experiencing faster price changes. Cleaner air pollution has a greater impact on property prices in cities with cleaner air. Climate policies and superior environmental technologies also influence consumer purchases. Addressing affordability has little short-term effect on house values, but building activity temporarily affects pricing. Investment in clean technology and climate action legislation may boost house prices and attract environmentally conscious individuals.

Practical implications

Based on these findings, policymakers seeking equitable and sustainable housing outcomes should consider these finding. It proposes evaluating city environmental features, eliminating environmental inequities, encouraging clean technology, balancing affordability and environmental concerns, monitoring and lowering pollutants and supporting sustainable building practices.

Originality/value

To the best of the author’s knowledge, this study is the first to analyse how environmental conditions, regulations on environmental action and demand-supply affect housing prices in 16 major UK cities. The connection between these factors is also examined in 8 cities with high and 8 cities with extremely low pollution. The research seeks to explore how environmental issues affect policy interventions to promote sustainable and equitable housing development. The asymmetric impact is examined using a panel quantile ARDL regression model. If property values are asymmetrical, the government should enforce severe environmental laws.

Citation

Alqaralleh, H. (2024), "Bricks and sustainability: a look at how environmental variables impact housing markets", International Journal of Housing Markets and Analysis, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJHMA-07-2024-0095