It was 14 years ago, in the summer of 2007, that the first signs of the global financial crisis appeared: the liquidation of two hedge funds heavily invested in mortgage-backed securities, and the start of the collapse of Northern Rock. This is more than enough time for a new economic model to take shape. After all, 14 years after Richard Nixon signalled the end of the “Keynesian” era by disbanding the fixed exchange rates system that shaped the post-1945 economy, Margaret Thatcher was on the cusp of her third election victory, and London was awash with “yuppies” making fast money out of the stock market.
The picture of Britain’s post-crash economic settlement was clear even before the dramatic impact of Covid. To put it bluntly, the proceeds of economic growth in the UK now flow entirely to asset-owners – including homeowners. Study after study has shown that in the decade after the financial crisis, average real wages simply stopped rising – something that had never happened in two centuries of industrial capitalism.
And yet, Britain’s housing market defies all…
