The financialisation of housing production: exploring capital flows and value extraction among major housebuilders in the UK

© 2021, The Author(s). This paper examines trends in the operation and financial performance of major UK housebuilders shortly before, during and after the global financial crisis (GFC) in 2008. It outlines two contrasting explanations of what has happened in the sector over this period. The first is described as an ‘institutional recovery’ perspective, in which a period of initial retrenchment after the crash was followed by steady reinvestment, and then a cautious move back to growth by the major housebuilding companies. This is set against what we describe as a ‘financialised recovery’ perspective. This explanation stems from our own analysis of the annual accounts of major UK housebuilders since 2005. It reveals the impact of the intensive financialisation of a sector initially weakened by the GFC, but where the strategic primacy of maximising shareholder value has been asserted more strongly than before. Our analysis of dividend payments post-GFC reveals this in the starkest of terms. We suggest that the sector has been in more robust financial health than implied by the ‘institutional recovery’ narrative, but that significant value is being extracted out of these companies, and indeed the sector overall, by institutional investors. The analysis provides unique insights into the financialisation of housing production, an issue which to date has received only limited attention. We reflect on the implications of identified trends for housing supply in the UK. We also sketch future research possibilities to examine the ongoing impact of intensive financialisation and the capital flows into, and out of, major housebuilders.