In this highly readable and well-informed text, Stuart Lowe makes a compelling case for the central role played by housing in modern welfare state regimes. Belying its somewhat narrow and arguably anodyne title, this is a ‘big picture’ critique which integrates social policy and political science with housing studies in its contention that the significance of housing has been grossly understated in much of the established welfare state literature. With its lively and revealing analysis of the worldwide role of housing policy and housing markets in creating the post-2007 global financial crisis, the book is also a highly topical story which should command a cross-disciplinary international readership.

A key objective of the book is to explain the development of Britain's ‘home owning society’ and how, as described by the author, this has shifted Britain from Beveridgian welfare state to ‘competition state’. However, while this analysis is supported by an insightful account of UK housing history, one of the book's major strengths is its ambitiously global perspective. Not only does Lowe seek to explain the evolution of housing systems and welfare states across the developed world, but in expounding his argument he utilises numerous illuminating case studies spanning a wide range of countries, including Denmark, the Netherlands and post-communist Russia.

In emphasising the importance of path dependency, one of the book's recurrent themes is the way that historical junctures in different countries have resulted in long-term divergence between national housing systems. This is interestingly highlighted in the contrasting evolution of state-supported working-class housing in the UK and Germany. The late nineteenth century saw both countries facing severe housing shortage and a major question on how workers were to be better accommodated. However, the ‘state provision’ route followed through Britain's council housing programme from 1919 was ‘blocked off’ in Germany through the disproportionate influence wielded by private property interests via the three class Prussian voting system and through the resulting distrust of direct state provision by the German workers’ movements. Instead, working-class housing in Germany evolved through a more pluralistic system involving trades unions, friendly societies and co-operatives.

As stressed by Lowe, the comparative welfare state literature has historically tended to focus largely or exclusively on health, social security and education, with little attention paid to the role of housing. Indeed, he notes that in the most influential text of this genre, Esping Anderson's The Three Worlds of Welfare Capitalism (Reference Esping1990), the word housing does not even appear in the index! However, developments over the past decade have, in Lowe's view, vindicated Kemeny's longer-established analysis which theorised a strong linkage between housing and welfare systems, especially as transmitted through the economics of home ownership (Kemeny, Reference Kemeny1981, Reference Kemeny1992, Reference Kemeny1995).

Lowe's central case is that through the medium of a globalised mortgage finance system, and thanks to the growing dominance of home ownership across the developed world, housing has played a key role in the post-1970s reconfiguration of welfare states across the OECD nations. Allied to the demolition of international trade barriers, banking system liberalisation in the 1980s released a ‘tidal wave’ of new capital into housing markets during the period to 2007. Substantial real house price inflation was one widespread result. Also critical to the restructuring of the mortgage market was the invention of securitisation, whereby (as allowed in many, although not all developed nations) home loans could be bundled into bonds to be sold on to investors, thereby offloading risk and creating a new supply of capital. Hence, for the last twenty to thirty years the world has been increasingly ‘immersed in a financial revolution that changed people's lives everywhere because “housing” was the conduit through which ordinary families were connected to this surge of new capital with massive implications for consumption’ (p. 168).

The key mechanism here has been ‘housing equity withdrawal’ (HEW) − that is, the ‘cashing-in’ of housing wealth by individuals. Part of this is about the widely recognised contribution of HEW to the financing of old age care through the outright sale of an older person's home (either to ‘downsize’ or to move from independent housing to institutional accommodation). Lowe links this to the concept of ‘asset-based welfare’ as first expounded by Sherranden (Reference Sherranden1991) and subsequently enthusiastically embraced by governments under pressure to constrain public spending while, at the same time increasingly aware of ageing populations and their public finance implications. Key policy consequences have included a dynamic in favour of home ownership and an accompanying narrative emphasising the moral duty of individuals to build up savings to fund welfare spending later in life. In particular, Lowe cites a pivotal UK Treasury paper from 2001 advocating a concept of asset-based welfare which ‘breaks the bond between citizens and the state because the state no longer guarantees a minimum income level, but instead guarantees equal opportunity to build up private assets’ (p. 205).

However, the importance of home equity withdrawal for individuals and for welfare state regimes goes much wider than the financing of aged care. Particular significance attaches to the form of HEW where a home owner can ‘take out a second mortgage’ and, hence, cash in housing equity without moving house. Especially through the burgeoning scale of such in situ HEW, owner occupiers have increasingly come to ‘think of their home literally as an institutional resource from which from time to time they could draw’ (p. 168).

Lowe cites fascinating evidence from a UK study by Smith and Searle (Reference Smith, Searle, Smith and Searle2010), showing that, by the mid-2000s, in any one year almost a third of home owners with mortgages withdrew equity and that the mean amount borrowed in this way peaked in 2007 at a mean value of £22,600. Moreover, the uses to which in situ equity withdrawal was being put had moved away from home improvement and towards forms of ‘welfare’ spending (especially those associated with divorce, redundancy and having a child). Associated qualitative research also demonstrated that home owners have ‘come to think about their housing wealth as an insurance against life's problems and necessities, a resource available at any stage, and not just after years of saving’ (p. 218).

Emphasising the scale of home equity withdrawal, Lowe also cites UK figures showing that in gross terms this peaked in 2003 at £63 billion. Buoyed by a popular ‘feelgood factor’ resulting from rising property values, this had risen from less than £2 billion in 1981. At its height, HEW was contributing nearly 9 per cent of total UK consumer spending. Less explicitly highlighted in the book are the implications of HEW for economic stability, especially given that following on from the global downturn it plunged in the UK from +54 billion in 2007 to –£28 billion in 2010 (Pawson and Wilcox, Reference Pawson and Wilcox2012). In other words, by 2010 net mortgage debt was being significantly reduced as the housing market downturn discouraged in situ HEW and pessimistic sentiment prompted mortgagors to reduce their debt exposure. This reversal means that demand equivalent to 9 per cent of total consumer spending was withdrawn from the UK economy over the three years to 2010. Hence, high rates of home ownership and relatively lightly regulated mortgage markets can combine to place modern economies at enhanced risk of volatility where underlying economic cycles are liable to be compounded by such ‘consumer behaviour’. Similarly, as noted by Lowe, from the perspective of individuals ‘access to welfare dependent on accumulated assets is terribly perilous and vulnerable to boom-and-slump cycles’ (p. 244).

Enhancing the book's value as a key resource for students of social policy, economics and housing studies, it is a widely referenced text which makes methodical use of summaries and boxed examples and succinctly defines many crucial concepts such as globalisation, asset-based welfare and securitisation. Overall, it represents a major contribution to housing studies and to the wider welfare state literature.