Credit Constraints and the Redistribution of Housing Wealth

Belinda Tracey and Neeltje van Horen

No 20997, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We examine how easing mortgage borrowing constraints affects entry into homeownership. Using administrative mortgage data and cross-district exposure to the UK Help-to-Buy program, which re-opened the 95\% LTV segment in 2013, we show that first-time buyer purchases rose sharply in more exposed areas. Introducing a new proxy for financial support — based on the gap between observed and predicted down payments — we find that gains were concentrated among households unlikely to have relied on transfers, suggesting a weaker role for family wealth in enabling homeownership. Because these buyers tend to have higher incomes, the composition of homeowners shifted toward higher-income households.

Keywords: Home ownership; Credit constraints; Housing wealth (search for similar items in EconPapers)
JEL-codes: D31 E21 G18 G21 R21 (search for similar items in EconPapers)
Date: 2026-01
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