The UK mortgage market has undergone important structural changes in recent years. A consequence has been that households are no longer generally subject to mortgage rationing. In this paper we examine some of the results of this change for the housing market. We first construct a simple theoretical model of the housing and mortgage markets and show, as an illustration of the effect of exogenous changes in general, how mortgage tax relief abolition would have different results under alternative regimes. We then quantify these results using a fully estimated model.
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