ABSTRACT
The extent to which the operation of the housing finance market affects the level of activity in the wider economy has been the subject of debate for some years. This has been caused partly by the very size of the housing finance market. In 1985, for example, building societies made net advances of £14 billion, about double the size of the public sector borrowing requirement. Total mortgage debt outstanding at the end of 1985 was equivalent to about two-thirds of the national debt, while the total assets of all building societies at the same date were three times those of the electricity supply industry, one of the most capital-intensive industries in the UK.
