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Peer reviewed2016England

The Impact of Supply Constraints on House Prices in England

Hilber & Vermeulen

Main finding

Housing prices responded more strongly to demand in places with tighter regulatory and physical supply constraints.

Their counterfactual model estimates 16.3% lower prices in an average travel-to-work area without regulatory constraints

Most important limitation

The 16.3% figure is a modeled counterfactual, not the observed effect of one reform, and the setting is England.

From the publication

Inspect the authors' figure directly

Study chart · redrawn

Figure 3 · Modeled house prices after removing supply constraints

The modeled price path is lower when regulatory and physical constraints are removed.

REDRAWN FROM STUDY DATAFigure 3 · Modeled house prices after removing supply constraints
Figure 3 · Modeled house prices after removing supply constraintsThe modeled price path is lower when regulatory and physical constraints are removed. Values digitized from Figure 3; regulatory counterfactual checked against the reported 16.3% average reduction in the archived publication; minor reading error is possible.050,000100,000150,000200,000250,000Average house price (£)YearPredicted priceWithout regulatory cons…Without physical constr…197419821990199820062008

Source: Hilber & Vermeulen (2016), Figure 3; PDF p. 38.

Read carefully: These are instrumental-variable model counterfactuals for England, not the observed effect of one reform.

How this study is used

Claims this evidence supports

Established evidenceScarcity turns neighbors into bidders.See the full evidence stack →

Policy connection

Solution guides informed by this study

02Bring back the homes between a house and a high-rise05Put more homes where the connections already are06Set clear rules—and say yes on time

Reference

Hilber & Vermeulen (2016). “The Impact of Supply Constraints on House Prices in England.”

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