House price shocks and household indebtedness in the United Kingdom

Disney, Richard, Bridges, Sarah and Gathergood, John (2010) House price shocks and household indebtedness in the United Kingdom. Economica, 77 (307). pp. 472-496. ISSN 00130427

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Abstract

We use household panel data to explore the link between changes in house prices and household indebtedness (both secured on housing assets and unsecured) in the United Kingdom. We show that households which are borrowing-constrained by a lack of housing equity as collateral make greater use of unsecured debt such as credit cards or personal loans. In response to rising house prices, which relax this constraint, such households are more likely to refinance and to increase their indebtedness relative to unconstrained households. However, for most households, house price movements appear to have little impact on indebtedness.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: H Social Sciences > HB Economic theory. Demography
Depositing User: Catrina Hey
Date Deposited: 10 Jun 2013 15:41
Last Modified: 10 Jun 2013 15:41
URI: http://sro.sussex.ac.uk/id/eprint/45188
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