Parasitic landlords are profiting from scarcity, as rents spiral out of control. Tenants are being pushed into a desperate situation – or even out onto the streets. To solve the housing crisis, we need expropriation and socialist planning.
Londoners are caught in a rat race when it comes to housing: increasingly being priced out of their homes; scrambling to find a place at a moment’s notice; and then competing with sizable numbers of others for accommodation that is typically poorer in quality than what they had before.
Such is the rental crisis that is falling on the working class like a tonne of bricks, as part of the wider cost-of-living catastrophe.
Scarcity and shortages
In the first quarter of 2022, property website Zoopla found that rent had increased by 20% in inner London, and 10% in outer London.
But these averages, damning enough in-and-of themselves, do not even scratch the surface of the problem. Many more extreme examples can be found in the capital, with some tenants being asked for year-on year-increases of 40% or more.
According to estate agent Foxtons, this price gouging reflects the fact that there are now 40% fewer homes available to rent in London compared to last year. As a result, on average, 28 renters are now competing for every new property that comes onto the market.
And taking advantage of the scarcity and shortage in the housing supply, profiteering landlords are laughing all the way to the bank.
For them, the unaffordability and unavailability of homes for ordinary people is not an indication of a broken model; rather, this status quo ensures that their bottom line remains sky-high. These fat cats therefore have no interest in solving the housing crisis.
Rapidly rising rents are not exclusive to London, of course. And while this might be padding the pockets of the few, it is upending working people’s lives and livelihoods.
Research by insurance firm Admiral shows just how deep the problem goes. They found that 52.7% of people cannot afford the average rental costs in the UK, while 86.5% of renters are priced out of the market in London.
The only city in Britain with worse figures is Bath, where 87.9% of renters cannot afford average local rents. And this is before other rising living costs are included, such as domestic energy bills, which are set to rise to £3,546 a year from October.
Those not immediately priced out of the London market face the joy of dealing with unscrupulous letting agents, who often put up advertisements for properties that falsely quote sums far lower than what they really expect tenants to pay.
These middlemen then explain – either at the door or on the phone – that above-asking-price is necessary if you stand a chance. No wonder many are left bewildered at how they will manage to find a roof to put over their head.
But with such intense competition for places, desperate prospective tenants often have little choice but to pay exorbitant prices for precious little.
One recently reported example saw a young renter being asked to pay a £600 deposit simply to view a home near London Fields in East London. Such audacity might even have made Thatcher blush!
But – under capitalism – this is all common practice, and completely above board.
It goes almost without saying that purchasing a house or a flat remains prohibitively expensive for millions. For most young workers, such a prospect would require a financial miracle to even become conceivably possible, with nominal house prices in Britain rising by 63% over the past decade.
With owning remaining a pipedream, and the ‘privilege’ of renting narrowing, tenancy agreements coming to an end has become the most common cause of homelessness.
As of December 2021, housing charity Shelter reported that 1-in-53 people in London were homeless – even before the most recent spate of rent spikes this year.
In fact, local councils in London (under both Tory and Labour control) have dutifully joined in kicking families out of their homes – either to destinations as far away as Newcastle, or onto the streets.
Those looking to continue living in the capital face a perfect storm. This has been decades in the making, and is now accelerating at lightning pace, as British capitalism is battered black and blue.
With landlords and property developers preying upon those hoping to stay in London, calls for a rent freeze have grown louder. Even Mayor of London Sadiq Khan has raised such a proposal, suggesting that this should last several years in order to address the cost-of-living crisis.
The labour movement should get behind such a demand, in order to prevent the rampant profiteering taking place amidst the ever-deepening housing crisis.
But similar to Labour’s suggestions of maintaining the existing energy price cap, such measures are at best a sticking plaster, as long as housing remains within the grip of the ‘invisible hand’ of the market.
Faced with rent controls, for example, landlords could well choose to sell, in order to take advantage of high house prices. This would reduce the rental stock even further, thus intensifying competition amongst tenants, which is already at record levels.
Indeed, even vague murmurings from the government about removing Section 21 (the eviction notice delivered to tenants ordering them to move out) has led to a sharp reaction from landlords, with a quarter saying they would sell if such a change was introduced.
Attempts to ‘calm’ the rental market – whether through rent freezes, appeals to the landlords, or any assortment of meek measures – will not suffice.
At the end of the day, it is the bosses, landlords, and private property developers who are responsible for rents and bills spiralling and skyrocketing upwards. And there can be no real solution as long as they – and their system – remain in control.
The rental crisis is testament to the wonders of the so-called ‘free market’; wonderful, that is, from the point of view of the landlords who have profited from scarcity, and of property developers who have raked in millions through speculation.
Indeed, what has been described as a “grim new reality” by British newspapers – this era of record inflation and endless austerity – is clearly not the same reality experienced by the bosses and landlords at the top.
In truth, enough homes already exist to end homelessness. Over 600,000 homes stand vacant in England alone. Similarly, the wealth and resources exist to build genuinely affordable housing for all. But these are simply in the hands of our class enemies.
The only way to fight price gouging and profiteering is to expropriate the parasitic major landlords and housing monopolies, bringing their property portfolios and assets under public ownership and democratic workers’ control.
On this basis, alongside the nationalisation of the big construction companies and banks, as part of a rational socialist economic plan, we could solve the housing crisis once and for all: carrying out a mass building programme of social housing, and ensuring the provision of quality homes for everyone.
- Expropriate the bosses and landlords!
- Nationalise the banks and construction monopolies!
- For socialist planning, not profiteering!