Tenure and Spending Within UK Households at the End of the Recent Recession

Nwachukwu, Jacinta Chikaodi orcid iconORCID: 0000-0003-2987-9242 (2017) Tenure and Spending Within UK Households at the End of the Recent Recession. Social Indicators Research, 133 (3). pp. 1075-1104. ISSN 0303-8300

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Official URL: http://dx.doi.org/10.1007/s11205-016-1409-z


Housing costs form a substantial share of aggregate demand in the UK. This study examines the distribution of total expenditure-to-income by homeownership status at the end of the recent recession in 2010. Multivariate quantile regressions uncover four important points. First, owner-occupiers in England have considerably higher mean spending ratios than their peers in other parts of the UK; an indication of their wealthier status. Second, the average spending ratio for residential-occupiers in all UK regions, with the exception of Northern Ireland, is significantly higher than the mean ratio for tenants in both private and public properties. In this last region, the spending rate for private tenants is more prominent. Third, the disparity in the expenditure ratio between owner-occupiers and tenants is significantly more pronounced in England. Fourth, renters in public housing in Scotland and Wales have much higher spending ratios than their counterparts in private properties, reflecting a greater overall social security provided by the devolved government there. Policy implications allied with heterogeneity in the consumption effect of housing wealth across the different homeownership cohorts is discussed.

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