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Credit Constraints and the Redistribution of Housing Wealth

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  • Tracey, Belinda
  • van Horen, Neeltje

Abstract

We examine how easing mortgage borrowing constraints affects entry into homeownership. Using administrative mortgage data and cross-district exposure to the UK Help-to-Buy program, which re-opened the 95\% LTV segment in 2013, we show that first-time buyer purchases rose sharply in more exposed areas. Introducing a new proxy for financial support — based on the gap between observed and predicted down payments — we find that gains were concentrated among households unlikely to have relied on transfers, suggesting a weaker role for family wealth in enabling homeownership. Because these buyers tend to have higher incomes, the composition of homeowners shifted toward higher-income households.

Suggested Citation

  • Tracey, Belinda & van Horen, Neeltje, 2026. "Credit Constraints and the Redistribution of Housing Wealth," CEPR Discussion Papers 20997, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:20997
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    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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