The Effect of Foreign Investors on Local Housing Markets: Evidence from the UK

Filipa Sa ()

No 1639, Discussion Papers from Centre for Macroeconomics (CFM)

Abstract: I use newly-released administrative data on properties owned by overseas companies to study the effect of foreign investment on the housing market in England and Wales. To estimate the causal effect, I construct an instrument for foreign investment based on economic shocks abroad. Foreign investment is found to have a positive effect on house price growth. This effect is present at different percentiles of the distribution of house prices and is stronger in local authorities where housing supply is less elastic. Foreign investment is also found to reduce the rate of home ownership. There is no evidence of an effect on the housing stock or the share of vacant homes.

Keywords: Foreign investors; House prices (search for similar items in EconPapers)
JEL-codes: F21 R21 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2016-11
New Economics Papers: this item is included in nep-eur and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:cfm:wpaper:1639

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