CHAPTER 4 – RESEARCH DESIGN
4.1 SAMPLE SELECTION PROCESS
– 4.1.1 Data on average house prices (UK House Price Index from landregistry as source of data on average house price)
4.1.2 Data on Loan-to-value mortgages
4.1.2.1 Data on 2-year fixed rate 95% LTVs
4.1.2.2 Data on 2-year fixed rate 75% LTVs
4.1.2.3 Data on 3-year fixed rate 75% LTVs
– 4.1.3 Data on Standard variable rate (Building societies association used for 2-year fixed rate 95% LTV, 2-year fixed rate 75% LTV, 3-year fixed rate 75% LTV and for Standard variable rate)
– 4.1.4 Data on interest rates (Interest rate data gathered from Bank of England)
4.1.5 Data on Unemployment
– 4.1.6 Data on Consumer price indices (Office for National Statistics used to generate data on Unemployment, Consumer price indices)
– 4.1.7 Data on Average earnings index (Royal London used for data on average earnings index.)
4.1.1 Data on average house prices
2003 2004
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31 Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
126152 128579 132727 136167 135964 146384 150937 150734
2005 2006
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31 Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
151723 156767 159183 160209 161531 168184 172738 176819
2007 2008
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31 Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
178636 186348 190032 189193 182845 181831 171660 160954
2009 2010
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31 Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
154452 159561 165314 168082 167878 171689 172972 168703
2011 2012
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31 Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
165649 167753 169544 167048 165947 170049 170295 168843
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
168681 172655 176098 177971
2013
4.1.2.1 Data on 2-year fixed rate 95% LTVs
2003 2004
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31 Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
4.20% 4.04% 4.86% 5.32% 5.17% 5.76% 5.63% 5.31%
2005 2006
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31 Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
5.48% 5.01% 4.74% 5.04% 5.04% 5.31% 5.44% 5.44%
2007 2008
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31 Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
5.88% 6.26% 6.32% 6.54% 6.59% 0% 0% 0%
2009 2010
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31 Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
0% 0% 0% 0% 0% 0% 0% 0%
2011 2012
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31 Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
0% 0% 0% 0% 0% 0% 0% 0%
2013
Jan1-Mar31 Apr1-Jun30 Jul1-Sep30 Oct1-Dec31
0% 0% 0% 5.08%
4.1.2.2 Data on 2-year fixed rate 75% LTVs
2003 2009
Jan1-Mar31 4.06% Jan1-Mar31 3.98%
Apr1-Jun30 3.85% Apr1-Jun30 4.45%
Jul1-Sep30 4.56% Jul1-Sep30 4.47%
Oct1-Dec31 5.05% Oct1-Dec31 4.05%
2004 2010
Jan1-Mar31 4.90% Jan1-Mar31 3.92%
Apr1-Jun30 5.52% Apr1-Jun30 3.67%
Jul1-Sep30 5.33% Jul1-Sep30 3.80%
Oct1-Dec31 5.07% Oct1-Dec31 3.50%
2005 2011
Jan1-Mar31 5.20% Jan1-Mar31 3.68%
Apr1-Jun30 4.77% Apr1-Jun30 3.36%
Jul1-Sep30 4.52% Jul1-Sep30 2.92%
Oct1-Dec31 4.74% Oct1-Dec31 3.22%
2006 2012
Jan1-Mar31 4.72% Jan1-Mar31 3.44%
Apr1-Jun30 5.00% Apr1-Jun30 3.74%
Jul1-Sep30 5.10% Jul1-Sep30 3.67%
Oct1-Dec31 5.15% Oct1-Dec31 3.35%
2007 2013
Jan1-Mar31 5.55% Jan1-Mar31 2.90%
Apr1-Jun30 5.98% Apr1-Jun30 2.63%
Jul1-Sep30 6.05% Jul1-Sep30 2.54%
Oct1-Dec31 6.06% Oct1-Dec31 2.40%
2008
Jan1-Mar31 5.80%
Apr1-Jun30 6.60%
Jul1-Sep30 5.96%
Oct1-Dec31 4.77%
4.1.2.3 Data on 3-year fixed rate 75% LTVs
2003 2009
Jan1-Mar31 4.59% Jan1-Mar31 4.41%
Apr1-Jun30 4.20% Apr1-Jun30 4.86%
Jul1-Sep30 5.02% Jul1-Sep30 4.82%
Oct1-Dec31 5.40% Oct1-Dec31 4.84%
2004 2010
Jan1-Mar31 5.23% Jan1-Mar31 4.68%
Apr1-Jun30 5.93% Apr1-Jun30 4.46%
Jul1-Sep30 5.63% Jul1-Sep30 4.33%
Oct1-Dec31 5.28% Oct1-Dec31 4.15%
2005 2011
Jan1-Mar31 5.24% Jan1-Mar31 4.44%
Apr1-Jun30 5.00% Apr1-Jun30 4.31%
Jul1-Sep30 4.88% Jul1-Sep30 3.58%
Oct1-Dec31 4.86% Oct1-Dec31 3.63%
2006 2012
Jan1-Mar31 5.05% Jan1-Mar31 3.91%
Apr1-Jun30 5.20% Apr1-Jun30 4.09%
Jul1-Sep30 5.33% Jul1-Sep30 4.05%
Oct1-Dec31 5.32% Oct1-Dec31 3.67%
2007 2013
Jan1-Mar31 5.78% Jan1-Mar31 3.30%
Apr1-Jun30 6.12% Apr1-Jun30 2.95%
Jul1-Sep30 6.47% Jul1-Sep30 2.91%
Oct1-Dec31 6.22% Oct1-Dec31 2.90%
2008
Jan1-Mar31 5.69%
Apr1-Jun30 6.39%
Jul1-Sep30 5.86%
Oct1-Dec31 5.11%
4.1.3 Data on Standard variable rate
2003 2009
Jan1-Mar31 5.49% Jan1-Mar31 4.06%
Apr1-Jun30 5.50% Apr1-Jun30 3.95%
Jul1-Sep30 5.31% Jul1-Sep30 3.91%
Oct1-Dec31 5.59% Oct1-Dec31 3.97%
2004 2010
Jan1-Mar31 5.81% Jan1-Mar31 4.04%
Apr1-Jun30 6.08% Apr1-Jun30 3.92%
Jul1-Sep30 6.59% Jul1-Sep30 3.93%
Oct1-Dec31 6.60% Oct1-Dec31 3.91%
2005 2011
Jan1-Mar31 6.61% Jan1-Mar31 4.07%
Apr1-Jun30 6.62% Apr1-Jun30 4.05%
Jul1-Sep30 6.40% Jul1-Sep30 4.12%
Oct1-Dec31 6.35% Oct1-Dec31 4.12%
2006 2012
Jan1-Mar31 6.41% Jan1-Mar31 4.10%
Apr1-Jun30 6.40% Apr1-Jun30 4.22%
Jul1-Sep30 6.65% Jul1-Sep30 4.29%
Oct1-Dec31 6.98% Oct1-Dec31 4.35%
2007 2013
Jan1-Mar31 7.19% Jan1-Mar31 4.34%
Apr1-Jun30 7.46% Apr1-Jun30 4.38%
Jul1-Sep30 7.74% Jul1-Sep30 4.35%
Oct1-Dec31 7.68% Oct1-Dec31 4.39%
2008
Jan1-Mar31 7.24%
Apr1-Jun30 6.92%
Jul1-Sep30 6.95%
Oct1-Dec31 5.38%
4.1.4.1 Data on interest rates
2003 2009
Jan1-Mar31 3.75% Jan1-Mar31 0.50%
Apr1-Jun30 3.75% Apr1-Jun30 0.50%
Jul1-Sep30 3.50% Jul1-Sep30 0.50%
Oct1-Dec31 3.75% Oct1-Dec31 0.50%
2004 2010
Jan1-Mar31 4.00% Jan1-Mar31 0.50%
Apr1-Jun30 4.25% Apr1-Jun30 0.50%
Jul1-Sep30 4.75% Jul1-Sep30 0.50%
Oct1-Dec31 4.75% Oct1-Dec31 0.50%
2005 2011
Jan1-Mar31 4.75% Jan1-Mar31 0.50%
Apr1-Jun30 4.75% Apr1-Jun30 0.50%
Jul1-Sep30 4.50% Jul1-Sep30 0.50%
Oct1-Dec31 4.50% Oct1-Dec31 0.50%
2006 2012
Jan1-Mar31 4.50% Jan1-Mar31 0.50%
Apr1-Jun30 4.50% Apr1-Jun30 0.50%
Jul1-Sep30 4.75% Jul1-Sep30 0.50%
Oct1-Dec31 5.00% Oct1-Dec31 0.50%
2007 2013
Jan1-Mar31 5.25% Jan1-Mar31 0.50%
Apr1-Jun30 5.50% Apr1-Jun30 0.50%
Jul1-Sep30 5.75% Jul1-Sep30 0.50%
Oct1-Dec31 5.50% Oct1-Dec31 0.50%
2008
Jan1-Mar31 5.25%
Apr1-Jun30 5.00%
Jul1-Sep30 5.00%
Oct1-Dec31 2.00%
4.1.5 Data on Unemployment
2003 2009
Jan1-Mar31 5.00% Jan1-Mar31 7.60%
Apr1-Jun30 5.10% Apr1-Jun30 7.90%
Jul1-Sep30 4.90% Jul1-Sep30 7.80%
Oct1-Dec31 4.80% Oct1-Dec31 7.90%
2004 2010
Jan1-Mar31 4.80% Jan1-Mar31 7.90%
Apr1-Jun30 4.70% Apr1-Jun30 7.80%
Jul1-Sep30 4.70% Jul1-Sep30 7.90%
Oct1-Dec31 4.80% Oct1-Dec31 7.80%
2005 2011
Jan1-Mar31 4.80% Jan1-Mar31 7.80%
Apr1-Jun30 4.70% Apr1-Jun30 8.20%
Jul1-Sep30 5.10% Jul1-Sep30 8.50%
Oct1-Dec31 5.20% Oct1-Dec31 8.30%
2006 2012
Jan1-Mar31 5.40% Jan1-Mar31 8.10%
Apr1-Jun30 5.50% Apr1-Jun30 7.90%
Jul1-Sep30 5.40% Jul1-Sep30 7.80%
Oct1-Dec31 5.50% Oct1-Dec31 8.00%
2007 2013
Jan1-Mar31 5.40% Jan1-Mar31 7.80%
Apr1-Jun30 5.30% Apr1-Jun30 7.70%
Jul1-Sep30 5.20% Jul1-Sep30 7.20%
Oct1-Dec31 5.20% Oct1-Dec31 6.90%
2008
Jan1-Mar31 5.20%
Apr1-Jun30 5.70%
Jul1-Sep30 6.20%
Oct1-Dec31 6.70%
4.1.6 Data on Consumer price indices
2003
Jan1-Mar31 75.255
Apr1-Jun30 75.408
Jul1-Sep30 75.858
Oct1-Dec31 76.159
2004
Jan1-Mar31 76.088
Apr1-Jun30 76.601
Jul1-Sep30 76.678
Oct1-Dec31 77.433
2005
Jan1-Mar31 77.542
Apr1-Jun30 78.143
Jul1-Sep30 78.565
Oct1-Dec31 78.918
2006
Jan1-Mar31 78.946
Apr1-Jun30 80.091
Jul1-Sep30 80.460
Oct1-Dec31 81.274
2007
Jan1-Mar31 81.366
Apr1-Jun30 82.028
Jul1-Sep30 81.875
Oct1-Dec31 82.967
2008
Jan1-Mar31 83.369
Apr1-Jun30 85.162
Jul1-Sep30 86.142
Oct1-Dec31 85.498
2009
Jan1-Mar31 85.759
Apr1-Jun30 86.689
Jul1-Sep30 87.083
Oct1-Dec31 87.972
4.1.7 Data on Average earnings index
2003 2009
Jan1-Mar31 110.90 Jan1-Mar31 137.70 435 (0.3166)
Apr1-Jun30 111.50 Apr1-Jun30 138.10 437 (0.3160)
Jul1-Sep30 112.90 Jul1-Sep30 138.30 437 (0.3165
Oct1-Dec31 114.00 Oct1-Dec31 138.90 439 (0.3164)
2004 2010
Jan1-Mar31 115.30 Jan1-Mar31 149.00 441 (0.3379)
Apr1-Jun30 116.50 Apr1-Jun30 140.70 444 (0.3169)
Jul1-Sep30 118.10 Jul1-Sep30 143.00 447
Oct1-Dec31 118.90 Oct1-Dec31 143.70 449
2005 2011
Jan1-Mar31 120.00 Jan1-Mar31 145.00 453
Apr1-Jun30 121.00 Apr1-Jun30 146.60 458
Jul1-Sep30 122.50 Jul1-Sep30 145.30 454
Oct1-Dec31 124.00 Oct1-Dec31 146.20 457
2006 2012
Jan1-Mar31 125.40 Jan1-Mar31 146.20 457
Apr1-Jun30 127.00 Apr1-Jun30 148.20 463
Jul1-Sep30 127.30 Jul1-Sep30 147.80 462
Oct1-Dec31 128.50 Oct1-Dec31 147.50 461
2007 2013
Jan1-Mar31 129.70 Jan1-Mar31 145.30 454
Apr1-Jun30 131.10 Apr1-Jun30 149.40 467
Jul1-Sep30 132.60 Jul1-Sep30 149.10 466
Oct1-Dec31 132.90 Oct1-Dec31 149.80 468
2008
Jan1-Mar31 135.70
Apr1-Jun30 135.50
Jul1-Sep30 136.60
Oct1-Dec31 137.20
Work out ratio of overlapping figures for all overlap dates – average this ratio to use to compute remaining dates – 0.3200 to 4dp – multiply average weekly figures by the ratio to keep all figures in same units