Mortgage underwriting and house prices: Evidence from the 2011 change in the Dutch Code of Conduct for mortgage loans

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Abstract
During the Global Financial Crisis, house prices sharply declined in all West‐European countries, but after an initial recovery the Dutch housing market experienced a second dip. This paper examines whether the introduction of the tightened Code of Conduct for Mortgage Loans in 2011 had an effect on Dutch house prices. We compare the evolution of Dutch house prices with a synthetic control of other European countries. Our results suggest that the introduction of the new Code of Conduct did indeed have a substantial negative effect on Dutch house prices in the 2 years following its introduction. Several robustness checks confirm this conclusion.

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