Capital Leakage from Owner-Occupied Housing

Capital leakage is defined as the conversion into disposable income of capital invested in housing assets. In debates on the capital demands of owner-occupation, one concern is the extent to which demand for mortgage finance results from the withdrawal of capital from owner-occupied housing and its expenditure elsewhere. The paper centres on an attempt to Quantify the likely dimensions of capital leakage using national statistical sources. Within severe data constraints it is estimated that capital release may fall in the range of £1,400–£2,600 million a year at 1980 prices. The paper concludes by considering policy implications in forms of any distorting effects on the savings and housing markets.