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

Veronica Backer-Peral (), Jonathon Hazell () and Atif Mian
Additional contact information
Veronica Backer-Peral: Princeton
Jonathon Hazell: London School of Economics (LSE)

No 2428, Discussion Papers from Centre for Macroeconomics (CFM)

Abstract: Every month, a fraction of UK property leases are extended for another 90 years or more. We build a new dataset of thousands of these natural experiments from 2000 onwards to estimate the expected long term housing yield, y∗. Starting from a level of 5.3%, y∗ starts to fall during the Great Recession, reaching a low of 2.8% in 2023. Real time data shows y∗ has not risen since 2021, despite rising shorter term yields. Cross-sectional estimates show that y∗ is higher in areas with more housing risk, and falls by more in areas with more inelastic housing supply.

Pages: 85 pages
Date: 2024-04
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Dynamics of the Long Term Housing Yield: Evidence from Natural Experiments (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:cfm:wpaper:2428

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