A dinner was held at the Café Royal on Tuesday, January 10th to celebrate the completion of forty years' existence by the British Food Journal and the British Analytical Control. A…
Abstract
A dinner was held at the Café Royal on Tuesday, January 10th to celebrate the completion of forty years' existence by the British Food Journal and the British Analytical Control. A number of eminent people were present, and complimentary references were made to the invaluable services which the Journal and the Control had rendered in assisting in the suppression of adulteration and in giving authentic indication of genuineness.
David McIlhatton, William McGreal, Paloma Taltavul de la Paz and Alastair Adair
There is a lack of understanding in the literature on the spatial relationships between crime and house price. This paper aims to test the impact of spatial effects in the housing…
Abstract
Purpose
There is a lack of understanding in the literature on the spatial relationships between crime and house price. This paper aims to test the impact of spatial effects in the housing market, how these are related to the incidence of crime and whether effects vary by the type of crime.
Design/methodology/approach
The analysis initially explores univariate and bivariate spatial patterns in crime and house price data for the Belfast Metropolitan Area using Moran’s I and Local Indicator Spatial Association (LISA) models, and secondly uses spatial autoregression models to estimate the role of crime on house prices. A spatially weighted two-stage least-squares model is specified to analyse the joint impact of crime variables. The analysis is cross sectional, based on a panel of data.
Findings
The paper illustrates that the pricing impact of crime is complex and varies by type of crime, property type and location. It is shown that burglary and theft are associated with higher-income neighbourhoods, whereas violence against persons, criminal damage and drugs offences are mainly associated with lower-priced neighbourhoods. Spatial error effects are reduced in models based on specific crime variables.
Originality/value
The originality of this paper is the application of spatial analysis in the study of the impact of crime upon house prices. Criticisms of hedonic price models are based on unexplained error effects; the significance of this paper is the reduction of spatial error effects achievable through the analysis of crime data.
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ALISTAIR ADAIR and STANLEY McGREAL
The adoption of statistical methods of analysis by British valuers has been, at the best, rather piece‐meal. This paper highlights the contrasting application of multiple…
Abstract
The adoption of statistical methods of analysis by British valuers has been, at the best, rather piece‐meal. This paper highlights the contrasting application of multiple regression analysis (MRA) within valuation practice in the USA relative to that in the UK and emphasises the need for suitable databases. Historically the valuer in the UK has lacked access to databases. The analyses presented in this paper indicate that, even if databases exist, factors such as statistical variability, heterogeneity, geographical scale and sample size may influence both the explanatory and predictive powers of the MRA model. Nevertheless the estimation of value from the objectivity of the MRA model can assist the valuer by supporting opinion or highlighting circumstances where re‐appraisal is necessary.
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ALASTAIR ADAIR and STANLEY McGREAL
The problem of obtaining suitable comparables has been recognised as the principal weakness in the direct comparison method of valuation. This paper utilising a data‐base derived…
Abstract
The problem of obtaining suitable comparables has been recognised as the principal weakness in the direct comparison method of valuation. This paper utilising a data‐base derived for Northern Ireland highlights the degree of statistical variability that exists in residential property values. It is shown that knowledge of variability can aid the valuer in looking wider for comparables in certain property types while also bringing attention to situations in which spurious comparables are statistically more probable. In conclusion the case is forwarded for a ‘pooled’ data base in which the level of information available for the valuer could be greatly enhanced.
Alastair Adair, Jim Berry, Stanley McGreal, Joanna Poon, Norman Hutchison, Craig Watkins and Kenneth Gibb
Property performance indices have invariably focused upon prime markets with a variety of approaches used to measure investment returns. However, there is relatively little…
Abstract
Purpose
Property performance indices have invariably focused upon prime markets with a variety of approaches used to measure investment returns. However, there is relatively little knowledge regarding the investment performance of property in regeneration areas. Indeed, there is a perception that such locations carry increased risk and that the returns achieved may not be sufficient to offset the added risk. The main objective of this paper, therefore, is to construct regeneration property performance indicators consistent with the CBRE rent index and average yield monitor.
Design/methodology/approach
Local market experts were asked to estimate rents and yields for hypothetical standardised offerings for a range of regeneration locations throughout the UK, covering the period 1995 to 2002.
Findings
The results show that rental growth was similar in regeneration locations compared to the prime market. However, the analysis highlights a major yield shift for property in regeneration areas in the short to medium term. The downward pressure in yields would suggest that once a regeneration area becomes established and rental growth emerges, investor interest is stimulated resulting in increased competition and a shortening of yields.
Originality/value
The significance of this research is the quantification of property investment performance from regeneration areas that previously has not been available to investment institutions and decision makers. From a policy perspective this analysis is of relevance in confirming the maturing of locations that have received high levels of public sector support and indicating the effectiveness of regeneration policy mechanisms in creating sustainable urban environments capable of meeting private sector investment goals.
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Stanley McGreal, Alastair Adair, Dylan McBurney and David Patterson
The potential application of data mining techniques in the extraction of information from property data sets is discussed. Particular interest is focused upon neural networks in…
Abstract
The potential application of data mining techniques in the extraction of information from property data sets is discussed. Particular interest is focused upon neural networks in the valuation of residential property with an evaluation of their ability to predict. Model testing infers a wide variation in the range of outputs with best results for stratified market subsets, using postal code as a locational delimiter. The paper questions whether predicted outcomes are within the range of valuation acceptability and examines issues relating to potential biasing and repeatability of results.
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Jacqui Daly, Stuart Gronow, Dave Jenkins and Frances Plimmer
This paper reports the results of empirical investigations that examine behavioural aspects of residential property valuations. Following the house price collapse of the late…
Abstract
This paper reports the results of empirical investigations that examine behavioural aspects of residential property valuations. Following the house price collapse of the late 1980s in the UK, there was considerable criticism of the valuation methods used by residential valuers. In particular for the current research, the valuation methods employed by valuers had not taken account of buyer behaviour in the valuation process, which contributed to inaccurate valuations. This research investigates both the attitudes of the consumers of residential property and the actual valuation methods used by valuers to determine whether they account for buyer behaviour accurately. The study was undertaken on a cross‐national comparative basis in the UK, Ireland and Australia and pursued on a qualitative basis. Overall, the research concludes that although valuers believe that buyer behaviour is an important part of the valuation process they simply do not consider buyer preferences. In effect, valuers have reduced the valuation task to a confirmation of bid price and, because of lender pressure which occurs worldwide, valuers overlook the economic sustainability of the property asset, which has severe implications for housing markets and national economies that interact with these markets.
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Lay Cheng Lim, Alastair Adair, Stanley McGreal and James Webb
The paper aims to contribute to the understanding of the current valuation practices and services offered across Asia, in particular the valuation techniques and methodology used…
Abstract
Purpose
The paper aims to contribute to the understanding of the current valuation practices and services offered across Asia, in particular the valuation techniques and methodology used by practising valuers in Hong Kong.
Design/methodology/approach
In order to gain professional opinions and an in‐depth understanding of Hong Kong valuation service providers, the methods and concepts used, and the extent of involvement with Chinese clients and businesses, the paper reports the findings of interviews with major real estate valuation firms and a survey of individual valuers involved in the appraisal of properties in Hong Kong and China.
Findings
The results show that there are significant differences between the strategic management and the operational level across several facets of the valuation process in Hong Kong and China. The paper contributes to an understanding of behavioural influences within valuation.
Research limitations/implications
The main limitation is the restriction of the survey on Hong Kong‐based valuers. Further research will widen evidence to valuers based in mainland China.
Originality/value
This paper presents the results of original empirical research utilising data drawn from interviews and survey questionnaires. The value of the work lies in the analysis of the strategic overview of the organisation, management and operation of appraisal practice in Hong Kong.
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Laura McCann, Norman Hutchison and Alastair Adair
Recent years have witnessed significant increases in the number of undergraduate students entering UK higher education. This increase is a result of the removal of the sector-wide…
Abstract
Purpose
Recent years have witnessed significant increases in the number of undergraduate students entering UK higher education. This increase is a result of the removal of the sector-wide cap on student numbers in England and Wales, along with a growth in overseas students attracted by the reputation of UK universities and the weakening of the value of Sterling. Adopting a corporate real estate perspective, the aim of this paper is to understand how the UK student residence market is structured and financed, and to identify the motivations that are driving the strategies adopted by the universities, private sector providers and investors in this market. In doing so, this research seeks to test the appropriateness of the Gibler and Lindholm (2012) model of corporate real estate strategy in the UK higher education sector.
Design/methodology/approach
Data was gathered from a survey of UK university secretaries, combined with interviews of private sector providers, bank lenders and the analysis of secondary data on investment flows into purpose built residential accommodation (PBSA).
Findings
UK university real estate strategy is mainly one of outsourcing student accommodation to reduce costs as well as employing modern purpose-built student housing as a marketing tool and brand enhancer. This strategy is also used as a risk mitigatory tool enabling universities to adjust to changing student demands. Revisions to the Gibler and Lindholm (2012) model are proposed to reflect the reality of the real estate strategy adopted by the universities. Private sector providers view the sector favourably and are set to be the main providers of new supply over the next decade, entering into strong partnerships with the universities. While there is evidence of some oversupply of bed spaces in certain cities, well-located developments are viewed as an attractive lending opportunity. Since 2013 there has been significant growth in institutional investment into UK student accommodation, albeit sentiment is currently tempered by political uncertainty.
Practical implications
The role of PBSA designed to meet modern student requirements is playing a critical role not only in attracting, recruiting and retaining students but also enhancing the overall higher education experience promoting student welfare and well-being.
Originality/value
The corporate real estate strategy adopted by the UK higher education sector is an under researched area. This paper focuses on the strategy surrounding student accommodation provision and reports on the findings of an extensive survey of the key players in this sector. The results are of value to all stakeholders including government and regulators, at a time when higher education is facing substantial challenges. The evidence of a growing partnership between universities and the private sector is viewed as a logical solution, both for the present and the foreseeable future.
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Since the 1980s UK academics have promoted the use of multiple regression analysis in property valuation. Recently, however, there has been growing recognition that regression…
Abstract
Since the 1980s UK academics have promoted the use of multiple regression analysis in property valuation. Recently, however, there has been growing recognition that regression models will be subject to aggregation bias if they fail to accommodate the existence of housing market segmentation (submarkets). In this study, we compare the empirical performance of a standard hedonic house price regression model for the city of Glasgow with a segmented model which recognises the importance of understanding the underlying market structure and, in particular, the existence of submarkets for different dwelling types. The results show that the (weighted) standard error of the segmented model is significantly lower than that of the market wide model. Consequently, we propose a two‐stage approach to the application of MRA techniques to residential valuation. First, following traditional institutional analysis of housing markets, the market should be subdivided into distinct structurally differentiated market segments. These segments can usefully be identified by principal components factor analysis which allows the identification of the most important common components in the housing bundle. Second, separate house price equations should be estimated for each market segment. Although the best‐fit equation may vary from sector to sector this is likely to reflect the behavioural realities of the property market, and will provide the basis for more accurate valuations.