Neoliberalism, the current economic agenda of the United Kingdom, with its core tenets of privatisation and financialization, has moulded the foundation of contemporary British state ideology. Consequently, housing policy in the United Kingdom today is a quagmire of private interests versus societal needs. Breaking open this mould, we can see a current and deliberate sustained transfer (Beswick et al., 2019) of state owned housing assets to private entities. These entities, such as private landlords, Private Housing Associations (PHAs), and corporate banks, utilise their housing assets as tools of wealth creation and control, rather than their original purpose, which was to serve as an asset to be owned by an individual family.

This all may seem trivial. Why would we, in a capitalist, free, and liberal society, not want to or own or allow the ownership and control of property by individuals and corporations. That is what we too, the ordinary people can achieve if we put our minds to it? The monopoly mindset made real?

However  this honourable steely eyed optimism of yore is, through leveraged (Debt) financed mortgages and government designed deficit reduction programmes that are predicated on the sale of housing, have reduced economic investment in public ownership of housing. This has set in motion. Increased inequality, rising house prices and underinvestment in public property have become the norm. To this extent a food chain is now worming its way even further into public life, predicated on ensuring ‘the rich get richer and the poor get poorer’. The devaluation of the lower and middle classes of society has once again become normalised, and maybe soon in the not too distant future may once again be considered dirty, ragged, and threadbare (The National Archives).

What one can derive from the current situation of the United Kingdom, without melodramatics, is that life has become increasingly hard. With housing costs at an all‑time high, local authority housing construction at an all‑time low, as shown in Appendix A, Figure A1, and privately rented housing increasing alongside the Impact of Construction variant on average housing costs in the UK, seen in Appendix A, Figure A2, as well as declining citizen life satisfaction (Mullins Pressnell, J. 2025; Clark, D. 2019; Office for National Statistics, 2023), it is clear that the system is no longer working for the benefit of all.

This article will not critique capitalism in its own right, as some of you may be thinking. The role of consumer‑based capitalism as a force for ensuring a better world for us all cannot be denied. What this article will challenge is the unchecked, and most importantly unregulated, power of neoliberalism within our economy, which utilises complex financial mechanisms to monopolise state infrastructure and public policy. It is powered by Transnational Corporations (TNCs) and High Net Worth Individuals (HNIs) and enabled by government‑backed austerity policies and civil reduction programmes.

The debate over the injection of neoliberal principles into British housing policy is both wide ranging and deeply divided. Yet there is broad agreement that neoliberal housing and wider sector reform took root under the Thatcher government in the late 1970s through the late 1990s (Beswick et al., 2019; Murie, 2016; Hodkinson et al., 2013), notably via the Right to Buy scheme. This scheme enabled, for the first time, private citizens to purchase a home from the government at a calculated rate. The policy was designed to reinforce the notion of “romanticised historical links between English freedoms and individualism” (Carr, 2011). What's more these policies were a calculated way for the government to incentivise individuals to diverge from the state welfare system in order to cut costs, implementing the economic 'efficiency of the market'. In other words offering long‑term council tenants government discounts based on the length of this tenancy, giving those who already had an advantage even more of an advantage. 

This flawed logic of housing was accelerated under the Blair government, which continued the trajectory in 1997 with the introduction of stock transfer, issuing rights and even wholesale transfers of taxpayer‑owned properties to Private Housing Associations (PHAs). It can be argued that this shifted the social norm of housing from a commodity to an investment in the United Kingdom, exacerbating financial disparities at the time and continuing to do so today (see Appendix A, Figure A2). You may find yourself asking how this is revolutionary; however, before that point there was an “established pattern of support for both council housing and home ownership” (Murie, 2016) in the United Kingdom that provided for the lowest in society. By stripping this away, the government opened the door to the might of global finance and, crucially, to the system of leveraged buying and buyouts as a norm within the housing sector and wider society.

With this in mind, we enter the belly of the beast. Leverage (debt). You can think of leverage or debt as the slow yet tumultuous disease within the crisis of neoliberalism. And you, dear reader, are infected, whether you realise it or not. In short, debt is an asset to those in the know, not a liability. So to clarify, a loan of one hundred pounds from the bank is an asset for them and a liability for you, because you must pay them back with interest, therefore generating them capital. TNC’s and HNI’s can utilise this system to boost their purchasing power by taking leveraged capital from banks and pushing it into other sectors, namely the subject of this article, UK housing stock.  

Who finances this Leverage? Banks. They generate wealth not only from assets but also from liabilities, namely the deposits made by individuals and institutions. Today, in a post 2008 world and market, banks can no longer lend out multiples of their reserves to create credit and expand their balance sheets. They must do so within regulation. One of the many parts of this regulation is the Capital Adequacy Ratio (CAR). See Appendix A, A3 for more information on how this works or check out a link to the FED here.

Therefore, current regulations state it is vital for banks to have a substantial amount of financial stability to cover capital flows and to ensure successful trading during the day. High net worth individuals (HNIs) contribute a significant amount to the day to day operations of a bank through capital facilitation, or as the bank would see it, liabilities, allowing the banks to operate by distributing assets (loans and mortgages) to other customers. Banks also rely on a broader mix of retail and institutional funding. For HNIs, interest income may be secondary to broader wealth strategies, but it remains a relevant component of portfolio management. However, HNIs also have the benefit of being able to use less liquid assets such as property and commodities to leverage, or borrow, capital from the bank. Therefore, the bank acts as a facilitator of leveraged capital. Debt.

This debt can then be utilised in capital markets by varying financial institutions unavailable to those below a certain deposit amount. Here property securities are traded in the form of mortgage backed securities (MBS). For those of you who have seen the Hollywood film The Big Short, these are a make up of individual mortgages that have been packaged into a ‘bag’ called a Collateralised Debt Obligation (CDOs). This turns a simple mortgage, a long term illiquid item, into a very liquid, easily tradeable one by which those with the means can continue to exploit their position, meanwhile the bank will sell these MBS’s to an asset management fund, Blackrock or Fidelity for example, or to ‘one of a million’ differing pension funds. The bank can and will generate capital through an upfront cash payment, strengthening their balance sheet further and allowing a replication of the system. However, it is important to note that the value that is returned will also rely on the type of tranche. Tranche is a fancy word for the value of a specific segment of the MBS. 

Now that we have cleared up the very basic principle of HNI investment and capital leverage, we can once again return to the system which we, and indeed where the UK government finds itself today. The ‘might and right of finance’ has overturned that of the aforementioned right to own property norm within the UK, and while this article will not speculate on the intention of this transition, one thing is clear: the need to reform the way in which governments procure housing and the means by which it enables housing to be distributed must be reformed so there can be fair competition between those with and those without. 

It can be said today that it doesn't matter how many houses are built if they are all bought up by private entities in the long echo chamber of the right to buy scheme. The coalition of these two forces, government and Leveraged finance, have created circumstances that have pushed the middle classes into a position where they can no longer own their own home, and ensured that, should they try to rent, sky high rental rates on properties owned by private and corporate landlords ensure that private renters on a median household income across England, Wales, and Northern Ireland could expect to spend about 30.5% of their income on rent alone (ONS, 2025). 

In the end, Britain’s housing story under neoliberalism is not simply about bricks and mortar, but about a system where Leveraged finance has become the true foundation of it all, and where the average citizen pays the price for a home that they can expect not to own. However opinions do remain diverse over the extent to which the privatisation of housing has decreased the efficacy of the housing market and its role in growing financial and by extent housing inequality worldwide and throughout the UK today (Sgambati, 2022).

In the second part of this three part series, we will analyse what this is doing to Britain's public sector and how this could be keeping it tied down.Leave your opinions in our internal chat room by signing up to LIOT Club. 

Appendix

Sources:

Beswick, J., Imilan, W. & Olivera, P., 2019. Access to housing in the neoliberal era: a new comparativist analysis of the neoliberalisation of access to housing in Santiago and London. International Journal of Housing Policy, 19(3), pp. 288-310. 

Carr, H., 2011. The Right to Buy, the Leaseholder, and the Impoverishment of Ownership. 

Clark, D. (2024). Gini Index of the UK 2019. [online] Statista. Available at: https://www.statista.com/statistics/872472/gini-index-of-the-united-kingdom/ [Accessed 19 Nov. 2025].

Hodkinson, S., Watt, P. & Mooney, G., 2013. Introduction: Neoliberal housing policy – time for a critical re-appraisal. Critical Social Policy, 33(1), pp. 3-16

Journal of Law and Society, 38(4), pp. 519-541.

Murie, A., 2016. A POLICY HISTORY OF THE RIGHT TO BUY, 1980-2015. In: The Right to Buy?: Selling off Public and Social Housing. s.l.:Bristol University Press, pp. 31-64. 

Ons.gov.uk. (2023). Life satisfaction - ONS. [online] Available at: https://www.ons.gov.uk/explore-local-statistics/indicators/wellbeing-satisfaction#line-chart [Accessed 19 Nov. 2025].

ONS (2025). Private rental affordability, England, Wales and Northern Ireland. [online] Ons.gov.uk. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/housing/bulletins/privaterentalaffordabilityengland/2024 [Accessed 19 Nov. 2025].

Sgambati, S., 2022. Who owes? Class struggle, inequality and the political economy of leverage in the twenty-first century. Finance and Society, 8(1), pp. 1-21. 

The National Archives (2025). The National Archives - Homepage. [online] The National Archives. Available at: https://www.nationalarchives.gov.uk/education/resources/voices-of-the-victorian-poor/health-and-the-poor-law/document-two-poplar/ [Accessed 19 Nov. 2025].