This paper investigates the impact of house prices on household consumption using micro data from the UK Family Expenditure Survey (FES). The authors find that rising house prices stimulate consumption, particularly for older homeowners, while the effect is insignificantly different from zero for younger renters. The study also reveals that regional house prices affect regional consumption growth, with predictable changes in house prices correlated with predictable changes in consumption, especially for households with borrowing constraints. The findings suggest that UK house prices are correlated with aggregate financial market conditions. The paper uses a pseudo-panel data approach to control for changes in household income, leverage, and demographics, and employs a life-cycle model to interpret the empirical results. The analysis highlights the importance of considering regional heterogeneity and the role of borrowing constraints in the relationship between house prices and consumption.This paper investigates the impact of house prices on household consumption using micro data from the UK Family Expenditure Survey (FES). The authors find that rising house prices stimulate consumption, particularly for older homeowners, while the effect is insignificantly different from zero for younger renters. The study also reveals that regional house prices affect regional consumption growth, with predictable changes in house prices correlated with predictable changes in consumption, especially for households with borrowing constraints. The findings suggest that UK house prices are correlated with aggregate financial market conditions. The paper uses a pseudo-panel data approach to control for changes in household income, leverage, and demographics, and employs a life-cycle model to interpret the empirical results. The analysis highlights the importance of considering regional heterogeneity and the role of borrowing constraints in the relationship between house prices and consumption.