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House price shocks and household indebtedness in the United Kingdom

journal contribution
posted on 2023-06-08, 15:06 authored by Richard Disney, Sarah Bridges, John Gathergood
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.

History

Publication status

  • Published

Journal

Economica

ISSN

00130427

Publisher

Blackwell Publishing

Issue

307

Volume

77

Page range

472-496

Department affiliated with

  • Economics Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2013-06-10

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