Credit constraints and the redistribution of housing wealth

Belinda Tracey and Neeltje van Horen
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Belinda Tracey: Bank of England
Neeltje van Horen: University of Amsterdam and Centre for Economic Policy Research

No 1147, Bank of England Staff Working Paper series from Bank of England

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 reopened the 95% loan-to-value 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: Homeownership; credit constraints; down payment; intrafamily transfers; housing wealth (search for similar items in EconPapers)
JEL-codes: D31 E21 G18 G21 R21 (search for similar items in EconPapers)
Pages: 69
Date: 2025-10-24
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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:023269

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