The role of the financialization in mortgage lending for regional polarization in Denmark

The Danish housing sector is characterized by being very liberal concerning mortgage lending with a high debt-to-income rate, but also a rather big renting sector with high renter protection. Thus, it originally did fit well into the Nordic model with an understanding of housing as a social right. However, during the last decades an extensive de-regulation of the mortgage lending market has taken place as well as a housing boom and bust, and during this development general understandings have shifted towards seeing housing as a means of wealth accumulation. This development has been discussed as problematic concerning societal inequality and the welfare state in general.
In this paper we want to focus on another dimension, namely the regional, urban-rural dimension, as this development might not only contribute to inequality between rich and poor but also between urban and rural areas. As the current rise in housing and property prices is mainly taking place in urban areas and cities, the development is very different in rural areas with a stagnating market and the relating difficulties in obtaining a mortgage loan, let alone wealth accumulation. In this paper we will present findings of a study on mortgage lending in rural areas in Denmark. This study is based on a mixed-methods analysis including a register-based longitudinal analysis of the development of the housing property market in rural areas in the context of reform and (de-)regulation of the market as well as qualitative case studies on practices of actors involved in mortgage lending in certain rural areas. We aim to present an in-depth look at this problematic development and will ask what it means for societal (in-) equality in the context of a universal welfare state.