Round the Houses: Homeownership and Failures of Asset-Based Welfare in the United Kingdom

Abstract

This article explores the contingencies of financialisation and housing. More specifically, how the spatial and temporal dynamics of the UK housing market ensure that homeownership does not (and arguably cannot) deliver welfare provision in the way envisioned by asset-based welfare initiatives. The first section demonstrates the fundamental problem of conceptualising households as asset-holders; in particular, with regard to housing-based welfare strategies and as part of financialised growth strategies in the UK, more generally. We show that continuing to assume residential housing is a static and unchanging asset-class depoliticises how asset-based welfare intensifies household indebtedness. The second section demonstrates the temporal, spatial and social limits of homeownership in the UK. We argue that the financialisation of housing in the UK is a unique set of political and economic circumstances that cannot be repeated; therefore, current gains from residential housing are a one-off wealth windfall to particular (lucky) groups within society. The temporal and spatial limits of gains from residential housing mean that the same conditions cannot be repeated (often enough) in the way required for residential housing to provide a generalisable welfare function. Finally, the article concludes by suggesting the potential of new research that incorporates temporal, spatial and social contingencies of housing to demonstrate how financialisation materialises in everyday life.

Keywords:

• housing
• homeownership
• asset-based welfare
• debt
• households
• Great Britain
• financialisation
• finance-led growth

Acknowledgements

An earlier version of this article was presented at the SPERI Inaugural Conference ‘The British Growth Crisis: The Search for a New Model’ held at Sheffield University, 16–8 July 2012, at the ‘Housing: Shelter or Storm?’ Workshop, at the Department of Business and Politics, Copenhagen Business School, 21–2 March 2013 and at the BISA Annual Conference, Birmingham, 20–1 June 2013. The authors especially thank Richard Ronald, Sebastian Kohl, Manuel Aalbers, Brett Christophers, Liam Stanley, Cesare Di Feliciantonio, Jannis van der Lohn and the anonymous referees for their constructive comments. Of course, the usual disclaimers apply.

Notes on contributors

Johnna Montgomerie is a Lecturer in Economics in the Department of Politics at Goldsmiths, University of London; prior to that, she was at the Centre for Research on Socio-Cultural Change (CRESC), University of Manchester. Her main research interest is in Anglo-American finance, in particular as it relates to households. Her recent publications include ‘America's debt safety-net' in Public Administration (vol. 91, issue 4, pp. 871–88) and with Dick Bryan, Randy Martin, Karel Williams ‘An important failure: knowledge limits and the financial crisis' in Economy and Society (vol. 41, issue 3, pp. 299–315).

Mirjam Büdenbender is a doctoral candidate at KU Leuven. Her work examines the relationship between finance and the real-estate sector in Russia and Ukraine, as part of the research project on the Real Estate/Financial Complex (Refcom). She graduated with a BA (Hons) in International Relations from the University of Sussex and MSc (distinction) in Political Economy from the University of Manchester.