{"title":"House Prices and Bank Lending to SMEs: Evidence From UK Local Authorities","authors":"Jalal Siddiki, Zilong Wang","doi":"10.1111/jors.70069","DOIUrl":null,"url":null,"abstract":"<p>Using panel data for 304 local authorities in the UK from 2014 to 2021, we empirically examine three issues: (a) how booms in house prices affect bank lending to small and medium-sized enterprises (SMEs); (b) whether these effects differ when SMEs hold larger amounts of real estate and buildings and (c) whether a rise in house prices can cause capital flight from the SME loan market to mortgages in the housing sector. We find that (i) a rise in house prices crowds out SME lending; (ii) mortgage lending increases with house prices; (iii) the crowding out effect of rising house prices on SME lending is mitigated when SMEs hold larger amounts of real estate and buildings. The main macroeconomic implication is that a strong housing market exerts negative spillover effects on the SME sector by moving capital away from SME lending towards housing mortgages.</p>","PeriodicalId":48059,"journal":{"name":"Journal of Regional Science","volume":"66 4","pages":"1210-1220"},"PeriodicalIF":2.4000,"publicationDate":"2026-09-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/jors.70069","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Regional Science","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/jors.70069","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"2026/5/20 0:00:00","PubModel":"Epub","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Using panel data for 304 local authorities in the UK from 2014 to 2021, we empirically examine three issues: (a) how booms in house prices affect bank lending to small and medium-sized enterprises (SMEs); (b) whether these effects differ when SMEs hold larger amounts of real estate and buildings and (c) whether a rise in house prices can cause capital flight from the SME loan market to mortgages in the housing sector. We find that (i) a rise in house prices crowds out SME lending; (ii) mortgage lending increases with house prices; (iii) the crowding out effect of rising house prices on SME lending is mitigated when SMEs hold larger amounts of real estate and buildings. The main macroeconomic implication is that a strong housing market exerts negative spillover effects on the SME sector by moving capital away from SME lending towards housing mortgages.
期刊介绍：
The Journal of Regional Science (JRS) publishes original analytical research at the intersection of economics and quantitative geography. Since 1958, the JRS has published leading contributions to urban and regional thought including rigorous methodological contributions and seminal theoretical pieces. The JRS is one of the most highly cited journals in urban and regional research, planning, geography, and the environment. The JRS publishes work that advances our understanding of the geographic dimensions of urban and regional economies, human settlements, and policies related to cities and regions.
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