Accounting for geography in property wealth re-concentration: the case of the UK

Studies of wealth inequality – be they historical, country-specific or comparative – tend not to take geography into account. This is surprising given the importance of housing – a spatially defined asset – in wealth... [ view full abstract ]

Studies of wealth inequality – be they historical, country-specific or comparative – tend not to take geography into account. This is surprising given the importance of housing – a spatially defined asset – in wealth accumulation trajectories. In response to this, the paper proposes that property wealth accumulation emerges from the intersection of three dimensions. The first is Piketty’s macro-economic drivers of wealth inequality, synthesised in his work as the r>g inequality: wealth concentration occurs most rapidly when the return on capital (linked to the level of taxation) is greater than growth (in population and productivity). The second centres on the actions designed to use space to accelerate or block property wealth accumulation, through processes such as speculation, gentrification, redlining or subprime lending. And the third are the state-level actions which can either minimise or exacerbate the effect of these spatial mechanisms, such as rent controls, construction freezes, (de)-commodification of housing or state-led regeneration. The paper uses the historical variations in the articulation of these three dimensions to provide a re-reading of the long run evolution of wealth inequality in the UK. This broadened framework is better able to account for the seeming paradox of wealth re-concentration in a context of relatively rapid growth.