Did the Furlough Scheme and Mortgage Holidays Prevent Mortgage Default?

This project investigates the extent to which the Job Retention Scheme and lender’s Mortgage Holidays, introduced during the Covid-19 crisis, reduced the incidence of mortgage default in the UK.

Aims and objectives

These policies had important effects in consolidating the financial positions of individual households and thereby likely contributed to the safety of the UK financial system as a whole.

The large-scale introduction of these support schemes is unprecedented in the UK, and despite their widespread use and the substantial cost to government and lenders, we understand little about their effectiveness.

This research uses data from household surveys from the Understanding Society Database and macroeconomic modelling techniques to help fill this gap. The project provides insights that help tailor the policies’ design to achieve maximum impact most cost effectively.

Outcomes, Findings and Communication

Our work has resulted in two reports that were acknowledged as Written Evidence by the UK House of Commons’ Committee on Public Accounts.

We disseminated our research findings to other academics, policy makers and the wider audience by running a one-day workshop on 20 July on The Economic Response to Covid-19. View the workshop programme. The workshop was attended by more than 60 participants and included presentations of five research papers and a panel discussion by Prof. Aditya Goenka (University of Birmingham, UK Government, ICJU) and Dr. Hande Küçük (Deputy Director NIESR).

Project Leads: Danny McGowan, Christoph Görtz 

This work is funded by the UKRI and the ESRC.

ESRC logo

Danny McGowan

Danny McGowan

Christoph Görtz

Christoph Gortz