Danielle Molinari and her two-year-old Frankie face being put out on the street. So does her 70-year-old neighbour Mary White, along with her adult son (and father of two) Bill. The same goes for the rest of the 93 households on London’s New Era estate. The question is why?

The obvious place to start is with American fund manager Westbrook, which bought an entire community’s homes up from underneath them and plans to jack up rents sky-high, forcing residents into homelessness. Then there’s Richard Benyon, the Tory MP whose multimillion-pound family estate partnered on the deal – until public shaming forced him last week to pull out. Got blame to spare? Then take your pick from an entire deck of weak-chinned politicians, starting with London’s mayor, Boris Johnson, all of whom have done so little to help so late in the day.

But something bigger is playing out in this little redbrick square on the fringes of the City – and it makes what happens next not just lifechanging for the people who live in it, but important for the rest of us, too. Because the real reason why Danielle and her neighbours must now fight like mad just to keep a roof over their heads is because their homes, and homes across the capital, have turned into an international asset class, to be bought and sold by speculators from across the world.

Britons jostling up the housing ladder is a tradition at least as old as the dinner party. Wealthy foreigners from dicey places stowing their cash in safe and stucco-fronted London postcodes: we know all about that. But, as New Era illustrates, much bigger, far more restless, forces are now at work.

Consider the purchaser: Westbrook, headquartered on Madison Avenue, New York. Set up in the mid-90s, the investment firm came of age just as businesses were coming round to the idea that owning their premises was fuddy-duddy and that the future lay in renting.

Westbrook has made millions from that fashion – buying, letting and selling trophy-office development in London and around the world. And it’s not been alone: in 2011 Cambridge academics found that 52% of the City’s offices were now owned by foreign investors, up from 8% in 1980.

That trend is now migrating to London homes. By buying New Era, Westbrook has become a giant absentee landlord. No one from that firm will set foot on the Hoxton estate, of course. Indeed, since the Benyons’ exit, tenants report they have not heard a word from the Americans who now own their homes. Instead, it’s been the council who’s conveyed messages back and forth. This relationship is extreme, but it’s hardly anomalous. Rather, it’s the inevitable result of property developers and estate agents renting out hotel ballrooms in Asia to sell flats off-plan to Singaporean dentists and the like.

Households on London’s New Era estate face being put out on the street. Photograph: Graham Turner/Guardian

Earlier this year a colleague and I spent months visiting a huge private development on the other side of the borough from New Era. Called Woodberry Down, it was a huge overhaul of an old council estate. In the showroom, the saleswoman pointed at the reservoir outside and said: “That water outside: very attractive to Asian buyers.” One of the new private tenants, Paul O’Neill, told us that he’d never met the man to whom he paid his rent, because he lived in Singapore. He added: “All of my neighbours rent from foreign absentee landlords.”

Going through the Land Registry, we traced O’Neill’s invisible landlord. He did indeed live in Singapore – in a public-housing block, in an area carpeted with public housing. That’s hardly unusual for the island state: about 85% of all Singaporeans live in public housing. So O’Neill, who desperately wanted to buy somewhere in London but could barely afford even the remotest suburbs, was paying rent to a landlord who lived in public housing.

Moreover, since 2009, the Singapore government had done everything possible to clamp down on speculation in its own housing market: clamping down on loans, raising taxes and punishing flippers of property. Most notably, it had imposed punitive levies on foreigners buying homes in Singapore.

All of these options and more have been urged on politicians in Britain. None of them have been taken up. The opposite: we’ve had a £1bn build to rent scheme alongside other housing guarantees, the encouragement of banks and building societies to lend. And the result of all these schemes in a national economy as lopsided as has been to further encourage hot money to flow into just one corner of a small country.

The cliche is that Britain has a housing crisis. It doesn’t: rather it has a whole series of different housing crises. In Northern Ireland huge swaths of homeowners remain in negative equity after the credit crunch. In Liverpool the problem isn’t of expensive housing, but of residents in Anfield and Granby fighting to maintain some say in what happens to their neighbourhoods. And in London the problem is that it is now almost impossible for anyone coming to the city to buy here, or increasingly to rent somewhere decent, either.

Contrast that with the founding ethos of New Era: built by a charitable trust in the 1930s in order to offer working-class residents affordable private rented accommodation. Even when the blocks were sold this spring, residents say they were assured that the old tenets would apply. Within weeks, new owners told them that rents would rise to market values: spiralling from £600 a month for a two-bed flat to something closer to £2,400. That was meant to happen by summer 2016. After Benyon’s firm pulled out of the deal last week, residents were told that Westbrook would accelerate the process.

Westbrook has form in rough treatment of those people who pay it rent. Earlier this year the New York attorney general ordered it and a business partner to make up for thousands of building violations and to pay $1m to tenants, to make up for illegal fees and overcharging. Foreign money has long flowed into and out of London in volumes – but it’s no longer going into business or other investments up and down the country; it’s been diverted into the Shard, countless private high-rises (somehow so much better than the council equivalents) and all the other new developments turning the capital into a new and unaffordable zone off-limits to the people who’ve lived there for decades.

Academics call this process financialisation: the sudden creation of new financial markets and instruments. Molinari and the other residents of New Era used to have homes: now they merely live in financial instruments.

I can think of one other aspect of everyday life where this has happened recently: food. Over the past 10 years, wheat and other staples have become a financial asset class, to be speculated in by Goldman Sachs and Barclays. The result has been misery and even starvation for the poor of the Third World. For the poor of London, the financialisation of property spells homelessness.