The media focus on rising interest rates and the impact on mortgages and home ownership is only part of the story. The housing crisis is even worse for the roughly one third of households across the UK renting their homes. There are 5.5 million in private rentals, and over a third of them spend half their take-home pay on rent.

Rents are being driven up by the rise in interest rates because small landlords dominate the private sector. Buy to let mortgages have doubled the number of private rentals since 2002. By comparison ‘build to rent’ schemes by large property investors are only just beginning to take off and are nowhere near enough to replace the small landlords who are selling up because they cannot cope with high interest rates or the rising demand for rented accommodation by people with no hope of getting a mortgage.  

This is yet one more massive failure of the market system to meet our basic need for affordable housing. We used to have a shared commitment to social housing. After WW2 governments of all complexions supported the building of council houses and during the next thirty five years they built 4.4 million homes. Then, in 1980, the Thatcher government introduced Right to Buy and restricted the powers and resources available to local authorities. By 1983 the level of social housing new builds had halved. There are now 1.5 million fewer social homes than there were in 1980, and numbers continued to decline by 14,000 last year.

Thatcher’s motivation was in part political, to create a home owning democracy of Tory voters. But it was also driven by the economic demands of capitalism. The long-term trend for the rate of profit to decline is behind the continuing crisis, and their answer is to squeeze us more and transfer wealth from labour to capital. Housing is a classic example. Housing benefit, or as it should be called, Landlord benefit is just short of £30 billion. Imagine how many council houses you could build with that!

Instead we have record levels of rent, record levels of evictions, either for rent arrears or because landlords are cashing in on their ‘investment’ through ‘no fault evictions’ of the people who actually paid their mortgage for them. The Financial Times estimates that 140,000 sold up last year. 1.1 million families are on the waiting list for social housing and Shelter reports that only 7,528 social homes were built in 2021/22.

The chaos in the housing market now threatens millions of homeowners as well. So will the Government act? So far they are calling on the banks that are profiting from the chaos to do something. Labour will no doubt respond with a fully costed, fiscally conservative policy of doing nothing. Capitalism once more demonstrates its moral, political and economic bankruptcy. It’s time for change. If they cannot build houses, we have to build socialism.

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