The provision of housing finance has been an issue of major importance in the United Kingdom, particularly since 1980, as financial deregulation and increased competition were followed by rapid growth in mortgage debt, and in real house prices. These developments have led commentators to a number of critical assessments of the UK system, notably given entry to the ERM, but rarely in the context of other countries' experience.
This article compares housing finance systems in seven countries--the United Kingdom, the United States, Germany, Spain, France, Italy and Japan. It focuses, in particular, on institutional structure and examines national variations in market structure and developments therein, in the context of an industrial economics approach to competition in financial markets. One conclusion is that a degree of convergence is observable, although the housing finance systems in the Anglo -Saxon countries have developed more rapidly than those in continental Europe and Japan. The article goes on to assess trends in house prices and personal sector gearing in relation to differences in the structure and development of national systems. It is suggested that the frequently supposed distinctness of the UK housing finance system should not be exaggerated and, moreover, that the currently more regulated systems could face some of the issues now affecting this country as deregulation proceeds. In an annex, the housing finance institutions of each country are described in some detail.
Housing finance - an international perspective