Blame the Thatcher Revolution and the sell-off of the council housing estates. Councils used to actually make money from housing, however, the revenue went back into building more homes, so more revenue. Rents were not extortionate or subsidised, however, if you were on benefits then you would get your rent covered.
The council housing provided an option at a base price, private landlords could not compete if they also had to pay for the mortgage, at a time when interest rates were a lot higher.
Once the council housing was sold off, there was no longer this base price, unless you wanted to spend five years on the list for a housing association, as in the privatised council housing estate.
This change meant that the best place for your money was in property. Property was no longer a near-depreciating asset, house price inflation went through the roof, but was not part of the inflation index.
Since then the economy has been that of rent-seeking. There is no point making stuff as you might as well sell the premises to a developer to convert into luxury flats, which then get bought by rent-seekers and rented out to people that would have had a full-feature council house in previous times.
When a rent-seeker has income from one property, they can remortgage to buy another, then use leverage to buy more and more.
Rent-seeking is not adding anything to the economy, no product is made. However, rent-seekers vote Conservative.
In an economy where everyone has to pay more for the parasites that are the rent-seekers, the cost of labour goes up. This is just because people need more money to pay to have a roof over their head, not because they want gold taps.
This is the root cause of the decline of the West, you are probably old enough to remember how this capital from rent-seeking spread out from London to even the slowest seaside town. Wherever it went, businesses stopped making stuff and started importing instead. Once that business of making stuff has gone, it never comes back.
The real value is in making stuff even though there is plenty of profit in retail, 'no product is made'. Furthermore, it is not possible to stop someone from doing the same as you, buying widgets from China, marking them up and flogging them with an English manual.
In the USA the situation is the same in the big cities. In the flyover states there is a different Ponzi scheme afoot, with vast tracts of suburbia built but without the long-term tax base to maintain the roads and other infrastructure indefinitely. So long as there is cheap oil and the dollar is the reserve currency, it all works with printing money, with the world taking the inflation hit, not the USA.
The sheds you see full of toys are not in New York, they will be somewhere such as Florida or Texas.