Surprises and Housing Tenure Decisions in Great Britain

The paper models the transition rates between the three main housing tenures in Britain. “Surprises” like partnership break-up, acquisition of a partner, and spells of unemployment are found to have large impacts on tenure changes. Through their effects on these transition rates, variation in the rate of arrival of such surprises affects the “equilbrium” housing tenure distribution of people. The transition rate models are estimated using two sources of longitudinal data: the first four waves of the British Household Panel Study (1991-1994) and data for the 1958 birth cohort from the National Child Development Study, covering their housing experiences from the ages of 16-33.