Bagpuss, The Wombles, Space Hoppers and Star Wars – icons of the 1970s as remembered by Dominic Sandbrook and the audience of real estate professionals at the 2012 Hogan Lovells Real Estate Seminar. For those who lived through the period, Sandbrook’s talk evoked a bleaker period when the oil crises caused the price of oil to spike by 70% overnight, inflation hit 26%, the working week was reduced to three days and and the miners walked out on strike (twice!). It now seems inconceivable but in 1976 Britain had to beg the IMF for a bail-out.
Despite, perhaps because of, this bleak economic situation, the 1970s was a period of evolution when the tectonic plates of historical change were shifting. The infamous Winter of Discontent meant that people were crying out for a new regime. Who could forget the graphic images of the West End of London, converted into a gigantic rubbish dump, with bin bags piling up while the press snapped photos of the fattest rats? As Prime Minister Jim Callaghan observed a few days before the general election in which Margaret Thatcher was voted into power: “You know there are times, perhaps once every 30 years, when there is a sea change in politics… There is a shift in what the public wants and what it approves of. I suspect there is now such a sea change – and it is for Mrs Thatcher”.
For real estate, the availability of credit and the huge property boom had a remarkable effect. By 1980 house prices had gone up by 10 times in 10 years. Those smart enough to have got a mortgage in 1970 would have had their mortgage subsequently wiped out by inflation. For commercial developers, the chance to rebuild the centres of London, Birmingham and Manchester meant profits on a scale that had never been seen before. In fact, by the mid-1970s office space in central London was worth five times more than it was in New York.
Sandbrook argued that although it is easy to categorise the decade as bleak and depressing, the fact remains that many people had never had it so good. Globalisation, energy, property, credit; the 1970s was the decade which laid the foundations for the Britain we know today. If 2012 marks a tipping point in political history similar to the late 1970s, it is interesting to speculate who might grasp the economic forces to reshape Britain in the same way that Margaret Thatcher did in 1979. David Cameron, Ed Milliband, Nick Clegg? Or are we still having it all and will another decade pass before the plates of change seriously begin to rumble?