Household Access to Mortgages in the UK

Ethnic minorities’ access to mortgages in the UK: The undesirable impact of the Great Financial Crisis

“…In contrast, our results show that both low-and high-income Black households are less likely to have a mortgage. Secondly, the size of ATTs we report for Black households is consistently larger in comparison to the treatment effects reported in Kara and Molyneux (2017). Hence, we argue that Black households' ability to access mortgages have deteriorated further in the period after the GFC.…”

“…So far, we have focused on the comparison between non-White and White households. However, the literature finds that there are differences between Black and Asian households when accessing finance (Deku et al, 2015;Kara and Molyneux, 2017) and it is argued that Black households are more likely to be excluded. Accordingly, we run our analysis separately for Asian and Black households.…”

“…In the UK, ethnic minorities face inequality in a number of areas in society (Equality and Human Rights Commission, 2016), including financial services (Devlin, 2005, Finney and Kempson, 2009, Kempson and Whyley, 1999. Limited empirical evidence on credit exclusion of ethnic minorities shows that in the UK non-White households are less likely to have consumer credit (Deku et al, 2016), and Black households with low incomes are less likely to have mortgages (Kara and Molyneux, 2017) when compared to White households with similar demographic characteristics.…”

“…A shortcoming of the previous UK studies is that the periods analysed do not reflect the full effect of the GFC. For example, the most relevant study for our analysis is Kara and Molyneux (2017), whose sample period spanned 2003-10. This is relevant because banking business became more challenging after the GFC as banks had to comply with increasing regulation, change business models (such as relying less on securitization), and curb their risk appetite.…”

The 2008 Chilean pension reform: household financial decisions and gender differences

“…On the one hand, higher household borrowing could be an important source of economic efficiency, increasing investment opportunities and, consequently, enhancing macro-financial stability. Financial inclusion has become a topic of increasing importance for policy makers, given its critical role in reducing poverty and fostering development (World Bank, 2014;Clifton et al, 2017;Kara and Molyneux, 2017). In this sense, the PBS can play an important role as an economic instrument to promote financial inclusion by increasing household access to consumer credit with positive consequences on social welfare.…”