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Research suggests UK housing credit binge backed by Government to pay for ageing population

Research at the University of Warwick suggests that the UK housing credit binge was encouraged by the Government to meet the cost of supporting an ageing population.

In a new book called ‘The Politics of Housing Booms and Busts,’ Professors Len Seabrooke and Matthew Watson from the University’s Centre for the Study of Globalisation and Regionalisation investigate the credit binge on housing during the past decade.

They argue the Government encouraged people to invest in housing assets as a way of accumulating wealth and making them less reliant on public pensions when they reached retirement.

The book, which is co-edited by Professor Hernan Schwartz from the University of Virginia, compares case studies from across the world and examines why Britons allowed themselves to get into higher levels of personal debt with no real safety net.

Professor Seabrooke said: “Housing is intimately tied to welfare systems and can be seen as a social right or as a means to acquire wealth over one’s life.”

Professor Watson said: “The Labour Government has responded to concerns about the future affordability of public pensions by pressing for a move towards an asset-based system of welfare.

“The housing market has become particularly important as a primary route through which the process of asset accumulation takes place, but of course this does mean that the whole of the Government’s welfare policy becomes increasingly tied to the ability of the housing market to sustain continual price increases.”

The book also investigates the connections between mortgage securitisation and the current international financial crisis.

Notes to editors:
The Politics of Housing Booms and Busts is published by Palgrave Macmillan. For more information contact Kelly Parkes-Harrison, Communications Officer, k.e.parkes@warwick.ac.uk, 02476 150483, 07824 540863