Does UK social housing affect housing prices and economic growth? An application of the ARDL model

Abstract

This paper aims to establish a relationship between social housing, house prices and the whole economy using ARDL models. We find that there is a negative relationship between social housing and house prices in the short run but no evidence in the long term. Additionally, social housing was found to be inversely related to the economic growth of the UK economy in the long run but not in the short run. Based on these findings, increasing social housing can benefit younger families with affordability issues in the short term without causing any long-term concerns in the housing market. However, it does not help economic growth in the long run. Therefore, the government must consider a balance of trade-off between the housing market and the whole economy.