This book provides evidence on how housing finance markets developed across Europe. The objective of the text is to bring together up to date material from across Europe which will help to clarify (i) how national housing finance markets have dealt with the challenges of deregulation and privatisation since the 1980s,(ii) how the financial crisis has impacted on the structure of the industry and the range of financial instruments available, (iii) how governments and the EU have responded to increasing risks and higher indebtedness in most West European countries and the need to grow new finance markets in Eastern Europe, and (iv) how changing housing finance markets impact on the capacity to provide adequate affordable housing into the future.
Jens Lunde, Department of Finance, Copenhagen Business School Jens Lunde has been Associate Professor in the Department of Finance at Copenhagen Business School since 1984. He previously taught in the Department of Economics at the University of Copenhagen and worked for the Danish Ministry of Housing and the Danish Building Research Institute. His main specialisms are in housing finance with a particular emphasis on the analysis of individual data. Christine Whitehead, Emeritus Professor in Housing Economics, Department of Economics, London School of Economics She works mainly in the fields of housing economics, finance and policy. She has worked with a wide range of international agencies as well as regularly for the UK government and parliament.
Notes on Contributors xv Foreword by David Miles, Professor of Financial Economics, Imperial College, London xxi Acknowledgements xxiii 1 Introduction: Milestones in European Housing Finance since 1989 1 Jens Lunde and Christine Whitehead Why analyse developments in housing finance? 1 Defining housing finance 3 The countries 4 Trends in mortgage systems 5 Mortgage debt and house price increases enabling each other? 7 Conclusions 13 References 14 2 European Housing Finance Models in 1989 and 2014 15 Jens Lunde and Christine Whitehead Introduction 15 Mortgage systems 16 Funding the supply of mortgages 21 Mortgage characteristics 25 Overview 33 References 35 3 Australia s 25 Years with a Deregulated Housing Finance System: Looking Back and Looking Forward 37 Judith Yates and Maria Belen Yanotti The economic and institutional environment of the last 25 years 37 Key milestones 39 Impacts and implications of changes 43 Emerging issues 48 Conclusion 51 Acknowledgements 51 References 52 4 Milestones in Housing Finance in Austria over the Last 25 Years 55 Alexis Mundt and Elisabeth Springler The economic and institutional environment of the last 25 years 55 Finance milestones 57 Impacts and outcomes 66 Looking to the future 70 Acknowledgements 71 References 71 5 Milestones in 25 Years of Housing Finance in Belgium 75 Sien Winters and Katleen Van den Broeck Introduction 75 The Belgian housing finance system 76 The economic and institutional environment of the last 25 years in Belgium 76 Milestones during the last 25 years of housing finance in Belgium 77 Impacts 86 Looking to the future 88 Acknowledgements 89 References 89 6 Milestones in Housing Finance in the Czech Republic since 1990 93 Petr Sunega and Martin Lux Introduction 93 Milestones in housing finance 95 Impacts 102 Future prospects 106 Acknowledgements 106 Notes 106 References 107 7 Milestones in Danish Housing Finance since 1990 109 Jens Lunde Introduction 109 The economic environment of the last 25 years 110 The Danish mortgage system 111 Key milestones 113 The impacts of these milestones over the last 25 years 117 Parallel development in house prices and owner occupiers net debt 118 The housing crisis, the national banking crisis and the Global Financial Crisis 121 The aftermath 123 The rescue operations 124 Looking to the future 124 Acknowledgements 125 References 126 8 Milestones in Housing Finance in England 127 Kathleen Scanlon and Henryk Adamczuk Introduction 127 The economic and institutional environment of the last 25 years 128 Milestones in private housing finance 128 Milestones in social and affordable housing finance 136 Impacts 138 Looking to the future 142 Note 143 References 144 9 Milestones in Housing Finance in Finland 147 Timo Tahtinen and Tommi Laanti Introduction 147 Key milestones 148 Impacts and implications of changes 154 Looking to the future 161 References 162 Further reading 162 10 Milestones of Housing Finance in France between 1988 and 2014: Is the French Credit System a Gallic Oddity? 165 Christian Tutin and Bernard Vorms Introduction: A quarter of a century later 165 Finance milestones 166 Specifics of French housing finance 171 Impacts 175 Looking to the future 179 Conclusions 180 References 181 11 Milestones in the Development of the German Housing Finance System in the Last 25 Years 183 Stefan Kofner The initial situation in 1989 183 Milestones at a glance 184 German reunification (1990): A friendly takeover by the white knight? 184 The conversion of homeownership subsidisation from a tax to a grant system (1996): Heading for a new balance of tenures? 186 Integration and deregulation of capital markets: risks for the future? 187 Trying to run a housing system without subsidies 190 Measures to rescue the financial system since 2008 191 The dynamics of the German system of housing finance since 1989 196 Notes 198 References 198 12 Moving from an Authoritarian State System to an Authoritarian Market System: Housing Finance Milestones in Hungary between 1979 and 2014 201 Jozsef Hegedus and Eszter Somogyi From socialism to capitalism: the economic and institutional environment 201 Finance milestones in the housing system 204 Impacts 214 The future of the housing finance system 216 References 217 13 Housing Finance in Iceland: Milestones 1989 2014 219 Ludvik Eliasson and Magnus Arni Skulason Introduction 219 The economic and institutional environment of the past 25 years 220 The bumpy ride of Icelandic housing finance 221 Impacts 232 Looking to the future 235 References 237 14 Milestones in 25 Years of Housing Finance in Ireland 239 Padraic Kenna Key milestones 239 Emerging issues 248 Conclusion 251 Acknowledgements 252 Notes 252 References 253 15 Milestones in Housing Finance in the Netherlands, 1988 2013 255 Marja Elsinga, Hugo Priemus and Peter Boelhouwer Introduction 255 Milestones over the three periods 256 Impacts 265 Reflection 270 Acknowledgements 271 References 271 16 Housing Finance in Norway: The Last 25 Years 273 Rolf Barlindhaug Introduction 273 The economic and institutional environment of the last 25 years 274 Finance milestones 275 The financial crisis 281 Impacts of the housing finance milestones 283 Looking into the future 286 Conclusion 287 Acknowledgements 288 References 288 17 Milestones of Housing Finance in Poland 291 Marta Wid ak and Jacek aszek Introduction 291 Housing finance milestones 292 Impact of housing finance milestones in Poland in the last 25 years 301 Looking towards the future 307 References 308 18 The Housing Finance System in Portugal since the 1980s 309 Romana Xerez and Jaime R. S. Fonseca Introduction 309 Context: a legacy of family financing, the impact of the 1974 revolution and the period to 1989 310 Milestones in the development of the Portuguese housing market and housing finance since 1989 313 Impacts 319 Conclusions 321 Acknowledgements 323 References 323 19 Evolution of the Housing Finance System in Russia 325 Maria Plotnikova, Andrey Tumanov and Evgeniya Zhelezova Introduction 325 Brief review of basic features of the Soviet era housing system 326 The housing system during the transition to a market economy (1990s) 328 Forming the basis for a housing mortgage financing system (1997 2005) 329 Between the market and the state (2005 2013) 333 State programmes to stimulate housing demand and supply 333 The effect of the GFC 335 What lies ahead? 337 References 339 20 Housing Finance in Slovenia: From a National Housing Fund to a Bank Driven System 341 Andreja Cirman and Richard Sendi The economic and institutional environment of the last 25 years 341 Major policy changes 342 Impacts 353 Looking to the future 356 References 357 21 Housing Finance in Spain: From the Liberalisation of the Mortgage Market to Booms and Busts 359 Irene Pena and Baralides Alberdi The economic and institutional environment of the last 25 years 359 Finance milestones 360 The impact of these milestones over the last 25 years 367 Looking to the future: financing into the future 372 References 374 22 Milestones in Swedish Housing Finance 375 Peter Englund Background 375 Key milestones 378 Impacts 386 Looking to the future 389 References 390 23 Housing Finance in Turkey over the Last 25 Years: Good, Bad or Ugly? 393 Yener Co kun Introduction 393 The Turkish housing finance system over the last 25 years from a marketisation perspective 394 Finance milestones: The rise of marketisation and changes in housing finance 400 Impacts of the transformation of the housing finance system 402 Future trends in housing finance markets 405 Gated communities and housing finance 405 Conclusions 408 Acknowledgements 409 References 410 24 Milestones in EU Housing and Mortgage Markets 413 Jennifer Johnson, Lorenzo Isgro and Sylvain Bouyon Milestones in EU housing and mortgage markets 413 1990 2000 Milestones: The Single European Market, deregulation and consolidation and product innovation 413 2001 2008 Milestones: EU focus on mortgage credit, growth of covered bonds and adoption of the Capital Requirements Directive (CRD) 418 2008 2014 Milestones: Restoring financial stability, consumer protection and unlocking long term financing 421 Conclusion 428 References 430 25 Following On From a Quarter of a Century of Mortgage Debt 433 Jens Lunde and Christine Whitehead Introduction: 1989 and 2014 433 Trends in mortgage systems over the quarter century 436 The impact of the GFC 439 Conclusions: looking back and looking forward 443 References 446