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

Felipe Carozzi, Christian Hilber and Xiaolun Yu

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: credit constraints; homeownership subsidy; Help to Buy; house prices; construction; housing supply; land use regulation; Fruition Properties (through LSE Advancement) and STICERD (search for similar items in EconPapers)
JEL-codes: G28 H24 H81 R21 R31 R38 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2024-01-01
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (2)

Published in Journal of Urban Economics, 1, January, 2024, 139. ISSN: 0094-1190

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http://eprints.lse.ac.uk/120627/ Open access version. (application/pdf)

Related works:
Journal Article: On the economic impacts of mortgage credit expansion policies: Evidence from help to buy (2024)
Working Paper: On the economic impacts of mortgage credit expansion policies: evidence from help to buy (2020)
Working Paper: On the Economic Impacts of Mortgage Credit Expansion Policies: Evidence from Help to Buy (2020)
Working Paper: On the economic impacts of mortgage credit expansion policies: evidence from Help to Buy (2020)
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