Dynamics of the Long-Term Housing Yield: Evidence from Natural Experiments

Veronica Backer-Peral, Jonathon Hazell and Atif Mian

American Economic Review, 2026, vol. 116, issue 3, 1014-51

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 percent, y* starts to decline when the Great Recession hits and reaches a low of 2.7 percent 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.

JEL-codes: E32 G12 Q54 R31 R38 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/aer.20240513 (application/pdf)
https://www.aeaweb.org/articles/materials/24730 (application/pdf)
https://www.aeaweb.org/articles/materials/24731 (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Dynamics of the long-term housing yield: evidence from natural experiments (2026)
Working Paper: Dynamics of the Long Term Housing Yield: Evidence from Natural Experiments (2024)
Working Paper: Dynamics of the Long Term Housing Yield: Evidence from Natural Experiments (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:116:y:2026:i:3:p:1014-51

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/aer.20240513

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().