Skip to main content Accessibility help

Housing, debt and the economy: a tale of two countries

  • John Muellbauer (a1)


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.


Corresponding author


Hide All

This paper draws on the Anglo-German Foundation lecture with the same title given at the Berlin-Brandenburgische Akademie der Wissenschaften in May 2017. I am indebted to Janine Aron for extensive comments, Felix Geiger of the Bundesbank and Manuel Rupprecht of the University of Muenster for help with German data, Yanitsa Kazalova and Andrew Goodwin for help with UK data and economists at the former DCLG and at the Resolution Foundation for useful discussions but take full responsibility for views expressed.



Hide All
AHURI (Australian Housing and Research Institute (2018), Pathways to Housing Tax Reform: Final Inquiry Report,
Andrews, D., Caldera Sánchez, A. and Johansson, Å. (2011), ‘Housing markets and structural policies in OECD countries’, OECD Economics Dept working paper 836.
Aron, J., Duca, J.V., Muellbauer, J., Murata, K. and Murphy, A. (2012), ‘Credit, housing collateral, and consumption: evidence from Japan, the UK, and the U.S.’, Review of Income and Wealth, 58 (3), pp. 397423.
Cameron, G., Muellbauer, J.M. and Murphy, A. (2006), ‘Was there a British house price bubble? Evidence from a regional panel’, Centre for Economic Policy Research, Discussion Paper 5619.
Chauvin, V. and Muellbauer, J. (2018), ‘Consumption, household portfolios, and the housing market in France’, forthcoming in Economie et Statistique/Economics and Statistics.
Crook, T. and Kemp, P. (2017), ‘How local authorities can foster investment by corporate landlords in new private rental housing’,
Diewert, W. E., de Haan, J. and Hendriks, R. (2011), ‘The decomposition of a house price index into land and structures components: a hedonic regression approach’, The Valuation Journal, 6(1), pp. 58105.
Eichel, C. (2015), Deutschland: Lutherland, Blessing Verlag, Munich.
Fernandez-Corugedo, E. and Muellbauer, J. (2006), ‘Consumer credit conditions in the United Kingdom’, Bank of England Working Paper 314.
Geiger, F., Muellbauer, J.M. and Rupprecht, M. (2016), ‘The housing market, household portfolios, and the German consumer’, European Central Bank Working Paper 1904.
IPPR (2016), ‘German model homes? a comparison of UK and German housing markets’, by Bill Davies, Ed Turner, Susanne Marquardt and Charlotte Snelling, Institute for Public Policy Research,
IFS (2015), ‘Housing: trends in prices, costs and tenure’, IFS Briefing Note BN 161 by Chris Belfield, Daniel Chandler and Robert Joyce,
Labour Party (2018), Housing for the Many: a Labour Party Green Paper,
Letwin, Sir Oliver (2018), ‘Independent review of build out: preliminary update’,
Leunig, T. (2011), ‘Community Land Auctions: working towards implementation’, Centre Forum,
Maclennan, D., Muellbauer, J. and Stephens, M. (1998), ‘Asymmetries in housing and financial market institutions and EMU’, Oxford Review of Economic Policy, 14 (3): pp. 5480.
Meen, G. (2001), Modeling Spatial Housing Markets: Theory, Analysis and Policy, Norwell, MA: Kluwer Academic Publishers.
Mirrlees Review (2011), Reforming the tax system for the 21st century,
Muellbauer, J. (1987) “The community charge, rates and tax reform”, Lloyds Bank Review (Oct 1987), p. 719
Muellbauer, J. (1987) ‘Anglo-German differences in housing market dynamics: the role of institutions and macro economic policy’, European Economic Review Papers and Proceedings, 36, pp. 539–48.
Muellbauer, J. (2005), ‘Property taxation and the economy after the Barker Review’, Economic Journal, 115 (502), March, pp. C99117.
Muellbauer, J. (2014), ‘Six fiscal reforms for the UK's ‘lost generation’,
Muellbauer, J. and Murphy, A. (1989), ‘Why has personal saving collapsed?’, Credit Suisse First Boston Research, July, 1989, 2677.
Muellbauer, J. and Murphy, A. (1990), ‘Is the UK's balance of payments sustainable?’, Economic Policy, pp. 348–95, with discussion by Mervyn King and Marco Pagano.
Muellbauer, J. and Murphy, A. (1997), ‘Booms and busts in the UK housing market’, Economic Journal, 107 (445), pp. 1701–27.
Power, A. and Zulauf, M. (2011), ‘Cutting carbon costs: learning from Germany's energy saving program’,
Resolution Foundation Intergenerational Commission (2018a), ‘Home affairs: Options for reforming property taxation’, by Adam Corlett and Laura Gardiner (March),
Resolution Foundation Intergenerational Commission (2018b), ‘Home Improvements: action to address the housing challenges faced by young people’, by Lindsay Judge and Daniel Tomlinson (April),
Resolution Foundation Intergenerational Commission (2018c), A new generational contract: The final report of the Intergenerational Commission (May),
Westerheide, P. (2011), ‘The private rented sector in Germany’, pp. 4560 in Scanlon and Whitehead (2011), Towards a sustainable private rented sector,
Whitehead, C. (2018), ‘Housing policy and the changing tenure mix’, National Institute Economic Review, 245, August.
MathJax is a JavaScript display engine for mathematics. For more information see


Related content

Powered by UNSILO

Housing, debt and the economy: a tale of two countries

  • John Muellbauer (a1)


Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed.