The Global Economic Crisis and the Reshaping of Housing Opportunities

Abstract

This paper begins by establishing the multi-scalar interconnectivity between global financial flows, the economic crisis and housing. Focusing particularly on developments in England, it then considers the transformation of debates and the justification for the “socialization of losses” and the substantial cuts in public expenditure through a neo-liberal “austerity” agenda. The paper argues that rather than addressing the fundamental tensions and contradictions within the current financialized model of capitalism, outlined in the first part of the paper, the responses of the UK Coalition Government and financial institutions have reinforced the recalibration of risk and responsibility. It then goes on to demonstrate the dynamics of, and contradictions within, the housing system in the context of wider policy and societal change. The paper highlights the emergence of strategies with the potential not only to reshape housing opportunities but also to further diminish access to, security and quality of appropriate housing across all tenures.

Key Words:

• Economic crisis
• Austerity
• Risk and responsibility
• Housing opportunities

Notes

1. The broader discussion of the global economic crisis in this paper refers to Great Britain. However, more specific discussions on impacts, policies and responses as well as housing trends will focus on England, although might also refer to Scotland, England and Wales, or Scotland, or just England. We do not address developments in Northern Ireland in this paper. Since devolution in 1999, Scotland has been able to establish its own parliament and to pass primary legislation. The National Assembly of Wales is a devolved administration which had, until 2007, only secondary legislative powers. Since 2007, the Welsh Assembly has been able to make its own laws on those devolved areas in which they have been given Legislative Competence Orders. Primary legislation passed in Westminster has applied to Wales, although following a referendum held in 2011, the powers of the Welsh Assembly are to be expanded. Housing policy in Wales has tended to follow a fairly similar pattern to England. The data are drawn from a range of surveys and sources, some of which cover England, or Scotland, or England and Wales, and others Scotland, England and Wales.

2. Looking at the income distribution, the Gini coefficient for the UK is seventh highest in the OECD, with a 0.8% increase in the Gini coefficient between mid-1980s and late 2000s, and well above the OECD average of 0.31 (behind Chile [0.50], Mexico [0.48], Turkey [0.41], US [0.38], Israel [0.37] and Portugal [0.36]). The UK has experienced higher than average income growth at the top of the income distribution, with those in the top 10% having experienced faster growth in disposable incomes than those at the bottom. The top 1% experienced still faster growth, and the top 0.1% the fastest growth of all. There is also greater risk of in-work poverty and greater concentrations of people on relatively low weekly incomes: nearly two-thirds of individuals live in households with below mean income (ONS 2010).