HOUSING, DEBT AND THE ECONOMY A TALE OF TWO COUNTRIES

• Published in: National Institute economic review Vol. 245; no. 245; pp. R20 - R33
• Main Author: Muellbauer, John
• Format: Journal Article
• Language: English
• Published: London, England Cambridge University Press 01-08-2018; SAGE Publications; Sage Publications Ltd. (UK)
• Subjects: Affordability; Affordable housing; Comparative analysis; External debt; Forecasts and trends; Germany; Housing; Housing authorities; Housing prices; Inequality; Land use; Laws, regulations and rules; Local government; Mortgages; Prices; Prices and rates; Productivity; Property taxes; Regulation; Risk; Social exclusion; Supply and demand; United Kingdom; United Kingdom; Germany; United Kingdom > UK; land-use and rental regulations; Housing markets in the UK and Germany; H20; G21; mortgage markets; residential mobility; H24; property taxation; R21; housing affordability; R31; R23; R38; house prices and volatility
• ISSN: 0027-9501; 1741-3036
• DOI: 10.1177/002795011824500112

In housing affordability levels and volatility, there could hardly be a greater contrast than between the UK and Germany. Differences in history, institutions and policies are explored in this paper. Residential housing supply has been far more expansionary in Germany and mortgage credit more tightly regulated. A sensibly regulated rental market and stable German house prices have combined to leave the rental sector with over half of tenures. Policy failures in the UK have resulted in widening intergenerational inequality, increased social exclusion, adversely affected productivity and growth and raised the risk of financial instability. Policy lessons are drawn for the UK, which go far beyond the remit of the immediately responsible Ministry of Housing, Communities and Local Government.