A finance- and real estate-driven regime in the United Kingdom

In the literature, it is argued that the Fordist regime of accumulation has gradually been replaced by a finance-driven regime. We argue that the contemporary regime in the UK could be best characterized as a finance- and real estate-driven regime. Like Fordism, the new regime is thought to fuel the economy by propping up consumption, but unlike the Fordist regime it does not seek to do so through job creation or high and steady wages, but rather through private money creation and real estate price inflation. The reliance of the economy on private housing debt rather than public debt—‘privatized Keynesianism’ (Crouch, 2011)—is a key element of the new regime. The state has not simply facilitated the rise of the new regime but has put its faith in the financial and real estate sectors—both residential and commercial—to prop up the economy. Different layers of the UK government have favoured real estate development and investment, in part enabled by disintermediation and lobbying. For a while, the finance- and real estate-driven regime seemed to create economic growth. Although the regime appeared fragile during the financial crisis of 2007–2009, the neoliberal mode and its accompanying finance- and real estate-driven regime were saved and the dominance of finance and real estate have deepened. This paper is based on the analysis of publicly available statistics, policy and advocacy documents and 39 in-depth interviews with real estate professionals.