Case Study: Finance and Housing Provision in Britain

The paper uses the systems of provision (sop) approach to analyse the transformed presence of finance in the UK housing sop since the 1980s. ‘Sop’ analyses look at the integrated chain of agents involved in providing a good and the structures and processes through which they relate to each other. Such a study of UK housing is carried out from the vantage point of finance, asking how the transformation of mortgage finance since the 1980s has reshaped housing provision. It is argued that the reregulation of mortgage markets, along with increased international capital flows and a sustained period of low interest rates, led to influx of mortgage credit. On the production side, this expansion of mortgage lending has tended to feed prices rather than supply, in part reflecting both the availability of development finance and the use to which it was put. The activities of speculative housebuilders have been increasingly organised around the appropriation of land uplift, over which housebuilders compete with landowners and planners. Labour has suffered from casualisation as a result of housebuilders’ focusing their in-house activities on land acquisition and subcontracting construction. Such processes have also had implications for the availability of skills and other inputs, technological progress, and industry structure. On the consumption side, the transformation of mortgage markets coincided with, and helped to create, increased demand for owner-occupation. The latter was itself the consequence of the legacy of forms of provision throughout the 20th century interacting with a concerted effort on the part of the state to instigate both welfare reform and a cultural shift in preferences over housing. More generally, the state’s influence over the housing sop is pervasive, with the state involved more or less directly throughout the chain of provision