Dynamics of the long term housing yield: evidence from natural experiments

Bäcker-Peral, Verónica, Hazell, Joe ORCID: 0009-0002-4930-7946 and Mian, Atif (2025) Dynamics of the long term housing yield: evidence from natural experiments. American Economic Review. ISSN 0002-8282 (In Press)

Text (UK_Duration (002)) - Accepted Version Pending embargo until 1 January 2100. Available under License Creative Commons Attribution. Download (7MB)

Abstract

Each month, a fraction of UK property leases are extended by 90 years or more. We construct a new dataset using thousands of these natural experiments since 2000, and estimate the expected long-term housing yield, y∗. After remaining steady at around 5%, y∗ starts to decline when the Great Recession hits, and reaches a low of 2.7% in 2024. The decline is steeper in inelastic markets, while y∗ remains higher in regions more exposed to long-run climate risk. Our estimate of y∗ is updated in real time using public data.

Item Type:	Article
Additional Information:	© 2025 The Author(s)
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory
Date Deposited:	06 Aug 2025 10:00
Last Modified:	07 Aug 2025 23:12
URI:	http://eprints.lse.ac.uk/id/eprint/129062

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