"Down Payment Constraints, Homeownership and Household Spending"
|Date||11 March 2021|
This paper shows that easing down payment constraints positively affects both homeownership and household spending. It studies a large-scale UK policy initiative called Help-to-Buy and exploits geographical variation in exposure to the program. It shows that HTB induced a significant increase in home purchases, especially benefiting young and first-time buyers. Except in the London area, the impact on house prices was subdued. Regions that experienced an increase in home purchases also experienced an increase in durable consumption. This points towards another channel through which homeownership and consumption interact.
*Co-authored with Belinda Tracey (Bank of England, Centre for Macroeconomics)
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