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The Ending of Mortgage Rationing and its Effects on the Housing Market: A Simulation Study

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  • Geoffrey P. Meen

    (Oxford Economic Forecasting, Templeton College, Oxford)

Abstract

The UK mortgage market has undergone important structural changes in recent years. A consequence has been that households are no longer generally subject to mortgage rationing. In this paper we examine some of the results of this change for the housing market. We first construct a simple theoretical model of the housing and mortgage markets and show, as an illustration of the effect of exogenous changes in general, how mortgage tax relief abolition would have different results under alternative regimes. We then quantify these results using a fully estimated model.

Suggested Citation

  • Geoffrey P. Meen, 1989. "The Ending of Mortgage Rationing and its Effects on the Housing Market: A Simulation Study," Urban Studies, Urban Studies Journal Limited, vol. 26(2), pages 240-252, April.
    • Handle: RePEc:sae:urbstu:v:26:y:1989:i:2:p:240-252
    DOI: 10.1080/00420988920080211
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    References listed on IDEAS

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    1. Kearl, J R, 1979. "Inflation, Mortgages, and Housing," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 1115-1138, October.
    2. Schwab, Robert M, 1982. "Inflation Expectations and the Demand for Housing," American Economic Review, American Economic Association, vol. 72(1), pages 143-153, March.
    3. Kearl, J R, 1978. "Inflation and Relative Price Distortions: The Case of Housing," The Review of Economics and Statistics, MIT Press, vol. 60(4), pages 609-614, November.
    4. Robert M. Buckley, 1982. "A Simple Theory of the UK Housing Sector," Urban Studies, Urban Studies Journal Limited, vol. 19(3), pages 303-311, August.
    5. Anderson, Gordon J & Hendry, David F, 1984. "An Econometric Model of United Kingdom Building Societies," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 46(3), pages 185-210, August.
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