Monthly Archives: January 2017

To understand Brexit in 2017 we need to learn from the UK housing bubble in 2007

On Valentine’s Day 2007, a short news item inside the Financial Times was the first report that the housing bubble in the US was about to collapse. Financial analysts in Germany had found that the US sub-prime housing mortgage market was seizing up.

Now ten years on, the worldwide economic waves from the collapse of the US housing bubble are still rocking the shores of the UK. The reports so far have focused on the impact on the major banks, with pictures of their big shiny office buildings in London and New York.

A better analysis would look beyond the banks and into local economies. UK housing values outside of London have not had a good decade. Some communities have seen property values collapse to 50% or less from their peak. The conventional explanation given is that the local economy has collapsed, too few jobs, too little pay. Blame the locals for their low skills.

Another explanation would swap the cart and the horse around: the collapse of housing values has drained wealth from the local economy. This is especially so since the 1980s when people were first encouraged or coerced to use the value of their home for their retirement income and for social care costs. But since then housing has switched from being a source of family capital to becoming a source of business revenue through high rents.

Politics and economics are two sides of the same coin. The collapse of the UK housing bubble, triggered by the US in 2007, has been very uneven. The so-called Northern Heartlands have seen the worst, especially outside of the main Northern cities. Wealth has been drawn back to London, and the London housing bubble continues to just about hold up, but under intense pressure.

Now map the Brexit vote onto the selling price movements in the UK housing market since 2007. The correlation is very clear.

Yes, the Brexit vote to leave was a protest. And it did involve a protest with London. But it wasn’t about metropolitan values, experts, or liberal elites – it was the sense in the wider country that London had used its tight hold on economics and politics to save its own housing market at many other people’s expense.

Populist movements have since tried to link the Brexit vote to immigration, sadly with some success. But London is a world city – so diverse, so many cultures, so many languages, and so many immigrants. Yet London voted to remain in the EU, while many other areas with negligible numbers of immigrants voted to leave.

To fix Brexit we need to fix the economy, and to fix the economy we need to resolve the aftermath of the UK housing bubble, a solution which has to include London.

Pundits are wrong when they claim that the Brexit leave voters wanted to go back to the 1950s. They didn’t. They just wanted to go back to 2006, before their homes and the local economy tanked.

Flying to Tenerife, the hard way

Today we flew to Tenerife, but only after a medical emergency divert from over the Atlantic to land at Brest in France.

A 40s male disabled passenger collapsed about an hour into the flight, the first we saw was the crew running back with an oxygen cylinder then a call out for any doctor, nurse or paramedic to identify themselves. Fortunately a nurse was found, and we diverted. Sitting as we usually do in the front row for access we saw how the crew handled the situation very well. We offered some medical devices but the crew had all they needed.

As we landed another aircraft was being held on the runway start, letting us land ahead of their take off, then we brake like fury on what is left of the runway and an ambulance and support vehicles are waiting nearby. The man had rallied a bit by then and was talking as he was taken off with his two family members.

Then their bags and wheelchair are removed, a cabin security check, refuel, and off we go again. As the French paramedics enter the aircraft the crew have to check their ID badges at the door. The crew manager told us this was her first divert ever, seven years and around 2,000 flights in.

Good team work, and all safe.

But they say that no good deed goes unpunished, so when we arrive at Tenerife our own electric wheelchair is nowhere to be found after searching all the holds in the plane. Nada, we were told.

We struggle with an airport manual wheelchair, highly unsupportive and consequently painful, and make our way via all departments to the Easyjet desk and gathering a team of helpers as we go, the discussions going in English and Spanish via a bit of German. We complete all the paperwork, but no-one knows if our electric wheelchair is still in Manchester or has been incorrectly offloaded in France or where now. We will reimburse you if you have to buy clean underwear, the forms say in their lost-luggage thinking, but the notion of a lost wheelchair seems not to tick any of their boxes.

We have our contacts here so we arrange a replacement electric wheelchair from a hire business next to our hotel, and they are smashing and really do their best. But wheelchairs are like shoes, they do not all fit the same, and it cause problems if you try, so our make-do is unsatisfactory despite their help.

Then having checked in to the hotel we are both working the phones trying to speak to anyone who might have a clue, but the Easyjet call centre woman is in Cape Town and seems only to have Google as an office resource, and Manchester Airport can only find a phone number for the baggage handlers in Edinburgh, and another suggested enquiries number shuts at 5.30pm.

So, if any Easyjet or Menzies staff read blogs, you have our number and a call would be appreciated, and our wheelchair promptly reunited with us would be even better.

What are the odds?

  • Update

Over a day later, the wheelchair eventually arrived at the hotel with travel stickers showing its convoluted route of: Manchester – Brest – Paris – Gatwick – Tenerife South.