Over the course of this month, house prices increased at their fastest rate since 2004. Prices rose 14.3%, up from 12.6% in February, and average house prices have now reached a record high of £265,312—21% higher than when the pandemic started.
This is a far cry from the beginning of Covid, when the financial press was teeming with stories about a potential crash in house prices. If people had suddenly been unable to pay their mortgages, repossessions would have increased, damaging banks’ balance sheets and leaving them unwilling to undertake more mortgage lending.
Repossessed houses would have flooded the market at the same time as mortgage lending dried up, increasing supply and constraining demand. And homeowners would have noticed the changing economic weather and moved to sell before prices fell further, exacerbating the situation.
This scenario would have been at the top of the Chancellor’s mind when he provided millions of homeowners with relief on their mortgage repayments, and when he set up the surprisingly generous furlough scheme.
The close link between housing wealth and voting patterns, and the stranglehold landlords have over the Conservative Party (not to mention the significant number of Tory MPs that are themselves landlords), has made protecting the wealth of homeowners and landlords one of this government’s top priorities.
And this is exactly what the government has achieved over the course of the last several years. As IPPR found in its analysis of the furlough scheme, 45% of the money distributed by the government ended up in the hands of landlords and banks as households used the cash to pay their rent and repay debts. IPPR correctly, and presciently, warned that channelling so much cash into the pockets of the very wealthy would be likely to increase inequality.
But it’s not just the government working to keep house prices artificially high. The Bank of England—which is independent from government, but certainly not independent from the interests of Britain’s huge finance and real estate sector—has pumped billions of pounds worth of new money into the financial system over the course of the last several years.
Fast forward to today, and the action of this government and the allegedly independent central bank have pushed up house prices to their highest levels in years, exacerbating the housing crisis and keeping millions of working-class young people off the property ladder.
This is no skin off the noses of the wealthy. High-income households put away millions of pounds in savings during lockdown, as their incomes remained stable, and their outgoings plummeted. Those savings are now being put to use in the property market, whether by better-off first time buyers, those looking to upsize, or those buying second or third homes for their children or as ‘investments’.
But it has definitely affected the poor. Landlords increased the amount they’re charging tenants by the highest percentage ever in 2021. Meanwhile, more than 1,200 people died while homeless in the same year—a direct consequence of the refusal of our government to refuse to invest in social housing, which itself stems from the domination of our politics by landlords.
The suffering of those on the streets—and those worried about ending up there—is the other side of the extraordinary wealth of those who make their living by extracting rents from working people.
Naturally, the government isn’t going to announce a shift in housing policy anytime soon. The Tories know that their electoral success and their cosy relationships with Britain’s property sector both depend on keeping property prices and private rents high, even if that means keeping millions of people off the property ladder. Their inability to keep existing homeowners happy while creating new ones will be one of the Conservatives’ biggest challenges in the years to come.
But thankfully, we don’t need to wait for the government to act to see action taken against Britain’s extractive rentier class. Grassroots organisations across the UK are organising tenants to bring the fight directly to landlords.
The London Renters’ Union has launched a campaign—#SideWithRenters—to pressure councils into protecting tenants’ rights ahead of the local elections in May. You can check out their campaign and see how you can get involved here.
The renters’ union ACORN is active in communities up and down the country struggling with high rents and homelessness, and against gentrification. And activists like Kwajo Tweneboa (who you can find on Twitter @KwajoHousing) are shining a light on the horrendous conditions faced by tenants living in poorly-maintained social housing.
When Engels wrote his series of articles on the state of working-class housing across the UK, ultimately published as The Housing Question, he never expected the British state to act to deal with the problem because ‘the state is nothing but the organised collective power of the possessing classes’.
But Engels also knew that if working-class tenants could organise themselves, neither their landlords nor the state would be able to ignore their demands. When the British labour movement made adequate housing one of its central demands after the Second World War, adequate housing was provided for millions of families up and down the country.
Today, after a decades-long assault on the labour movement has left it a shadow of its former self, tenants have to figure out new ways to organise. Organisations like ACORN and the LRU are leading the way: it’s up to us as socialists to make sure tenants up and down the country know about their efforts and get involved in the fight.