On the economic impacts of mortgage credit expansion policies: evidence from help to buy

Carozzi, Felipe ORCID: 0000-0002-0458-5531, Hilber, Christian ORCID: 0000-0002-1352-495X and Yu, Xiaolun (2024) On the economic impacts of mortgage credit expansion policies: evidence from help to buy. Journal of Urban Economics, 139. ISSN 0094-1190

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Abstract

We take advantage of two spatial discontinuities in Britain's Help to Buy (HtB) scheme to explore the effectiveness and distributional implications of mortgage credit expansion policies. Employing a Difference-in-Discontinuities design, we find that HtB significantly increased house prices and had no detectable effect on construction volumes in severely supply constrained and unaffordable Greater London. Conversely, HtB did increase construction numbers without a noticeable effect on prices near the English/Welsh border, an affordable area with comparably lax supply conditions. While HtB did not help would-be-buyers in already unaffordable areas, it boosted the financial performance of developers participating in the scheme.

Item Type:	Article
Additional Information:	© 2024 The Author(s)
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor > HD100 Land Use
JEL classification:	G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies H - Public Economics > H8 - Miscellaneous Issues > H81 - Governmental Loans, Loan Guarantees, and Credits R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R31 - Housing Supply and Markets R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R38 - Government Policies; Regulatory Policies
Date Deposited:	05 Jul 2024 14:18
Last Modified:	05 Jul 2024 14:21
URI:	http://eprints.lse.ac.uk/id/eprint/124116

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