The Great Rental Rip Off

The cost of renting from private landlords has been steadily rising across the UK for years. Combine this with deeper cuts to public services, wages, and working hours, and the attacks on working class people get worse and worse with each blow. In parliament in February of this year, Sajid Javid, the Conservative communities secretary, admitted that the average house price in the UK was now at 7.5 times the average annual income, making home ownership a distant dream for most people. What’s more, rents in many parts of the country were more than half of the average take-home pay, with London and the South-East as particular problem areas for unaffordable rents.

Increasingly, people who have jobs are being forced to claim housing and other benefits in order to afford the cost of rent – thanks to rising costs, shorter and unreliable working hours, and terrible pay. Yet despite the fact that more and more people are forced to claim benefits to top-up sub-standard wages, a recent BBC investigation found that out of around a sample of 11,000 online listings for spare rooms, all except a few hundred stated benefit claimants were not welcome. With a rental market like this, on top of underemployment and austerity cuts, it’s no wonder that more and more people are unable to afford a place to live. The number of young adults aged 20 to 34 forced to remain living with their parents rose by almost half a million in the UK from 2008 to 2015. More shockingly still, homelessness in the UK in 2016 was double what it was in 2010.

Paying more for less

Not only has the cost of renting a home been getting higher and higher, but the quality of private rental properties has been getting worse and worse. People are expected to live in cramped, inadequate housing, often in unsafe conditions – often for extortionate prices. Statistics released in 2015 showed that the number of people aged between 45 and 55 living in flat or house shares due to unaffordable homes had risen by 300% since 2010. There are so few affordable properties that people are increasingly living in overcrowded house shares, well beyond their student years.

A collection of rental adverts for properties in London gained notoriety on the internet when they were collated on a well-known news blog; the collection included a room that could quite literally only just fit a single mattress in for £700 a month, and a room that was evidently a small kitchen with a single bed in it for £870 a month. The situation is particularly bad for students. A survey conducted by the NUS in 2014 found that over half of student properties for rental had condensation, mould or damp problems, and a quarter had vermin infestations, ranging from slugs to mice.

Supply and Demand

At the beginning of 2017, the Royal Institute of Chartered Surveyors (Rics) – the body responsible for accrediting landlords, property developers, and others in the property industry – conducted a survey in the UK of rental properties, and found that rents are likely to rise a further 25% in the next few years. Rics said a huge part of the problem was the lack of new listings. The survey also predicted landlords would further scale back their portfolios in the next 12 months – meaning tenants having even fewer properties to choose from – further pushing up rental prices.

The number of home completions in England has been lower than any other country in Europe – relative to its population size – for the last thirty years. The construction sector was hit particularly badly in the 2008 financial crash, when output dropped faster than in any other sector of the UK economy. Ever since then, with wages low and people unable to afford housing, there’s no real incentive for the investors to start building again. A chief executive for a large UK construction consultancy firm said in March 2017 that “building new homes to meet the government’s targets for solving the housing crisis are already significantly behind”, and the instability in the markets that Brexit produced has done nothing to alleviate this issue.

As the population increases generation on generation, the demand for new and affordable housing only rises. But nobody is building! The idea that supply will always move to match demand, under capitalism, is clearly completely false. There is a colossal demand for decent quality, affordable housing; but with capitalism in a stagnant period like it is today, where people’s wages are low and employment unstable, investing in building such housing is not profitable to the individual capitalist – no matter how useful it might actually be to all of us.

The need for a planned economy

When the economy is based around individual profit and competition, rather than co-operative and collective gain, supply and demand will only meet when there is profit to be made for the individual capitalist. Ultimately, this is bad for the economy in the long run. If decent, affordable houses were to be built, it would create jobs in the construction sector, reduce the need for people to rely on housing benefits, and provide a better quality of life for millions currently living in substandard housing. Unfortunately, that’s not how capitalism works: it would take a democratically planned economy, based on collective need rather than individual profit, for such a thing to happen.

The only way to solve the housing crisis is to take the housing industry into public democratic ownership, and to plan the building of houses to genuinely meet demand. No to rentier capitalists and speculators, no to the interests of private capitalists coming before the interests of the people! No to capitalism! Fight for socialism!

by John Russell, UEA Marxists