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The rise in subprime mortgages in the early 2000s may havedriven up rents, and put the rental market at greater risk oflease default

Ambrose, Brent (2014) The rise in subprime mortgages in the early 2000s may havedriven up rents, and put the rental market at greater risk oflease default. LSE American Politics and Policy (25 Jul 2014). Blog Entry.

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Abstract

Much research and commentary has been written on the impacts of subprime and other ‘exotic’ mortgage products in the aftermath of the 2008 financial crash. In recent research, Brent Ambrose looks back to the early part of the last decade and finds that the rise of subprime mortgages had a spillover effect on the housing rental market. He finds that higher-income renters left the market to take advantage of easier credit for mortgages. As a result, a higher proportion of households remaining in the rental market had lower incomes and a higher incidence of default on their lease contracts, which in turn led to rising rents. He argues that while the promotion of subprime mortgages was ostensibly so that people could own a home, the policy may have had a disproportionately negative impact on the part of the population least able to bear the increased rents.

Item Type: Website (Blog Entry)
Official URL: http://blogs.lse.ac.uk/usappblog/
Additional Information: © 2014 The Author
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
Sets: Collections > LSE American Politics and Policy (USAPP) Blog
Date Deposited: 14 Aug 2014 13:09
Last Modified: 05 Sep 2014 08:27
URI: http://eprints.lse.ac.uk/id/eprint/59010

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