The secondary banks, like the larger institutions, had been lending heavily based on the previously rising housing prices of the late 1960s and early 1970s, borrowing excessively in relation to the collateral assets.
On 19 December 1974, a rent freeze by the Edward Heath government which had lasted since 1971 was ended, and the Bank of England, which had severely restricted the supply of credit for housing in 1971, released more funds.
[3][4] While housing prices and lending recovered in 1975, inflation continued to rise, leading to greater economic, labour and political problems for Britain.
Some blame the lax regulation of lenders and policy-driven inflationary pressures (the 'Barber Boom', named after Chancellor of the Exchequer Anthony Barber), which failed in its target of lowering the high unemployment rate.
The period was also marked by a series of crises, including the political uncertainty of the Heath government, waves of public sector and industrial strikes and oil shortages that led to a government-mandated three-day work week.