It is hard to believe that the perception until the late 1980s was that housing only played a modest role in the macroeconomy. The international liberalisation of mortgage finance and the Global Financial Crisis contributed to a changed view; housing is now seen as influencing aggregate demand (particularly through household expenditure), labour mobility and productivity and, because of its volatility, has to be taken into account in macro stabilisation policy. Furthermore, the UK (and many other countries) experience chronic affordability problems, particularly affecting the young and those on low incomes, but the problems vary between different parts of the country.
These issues – macroeconomic, microeconomic and spatial – are the concern of this theme, bringing together evidence on how housing systems work through the interlinkages between housing, the economy and the different tenures; recent work has concentrated on understanding the drivers of affordability and the impact of different policies, including supply expansion and new research on the property tax system. On-going work concerns the highly-persistent spatial differences in labour productivity and how the local skill mix is influenced by housing. Since urban residential structures are long-lasting, this requires us to adopt historical approaches as one part of the story.
Prof Ken Gibb (University of Glasgow)
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