Renters v. Rentiers

How does anyone​ make sense of Britain’s rental crisis? Let’s start with Ruby’s story – and that of her landlord, which is inseparable from her own though they’ve never met. Ruby was born in Kent, where her mother had been sent to live as a teenager while under the care of a local authority in London, ‘a forgotten girl’, as Ruby called her, ‘shifted out to wherever was cheap’. The family flitted between council housing and privately rented accommodation; by the age of six, Ruby had already gone to four different primary schools. When she turned eighteen, her father threw her out and she was forced to find a cheap flat of her own.

‘I think of those days as my “Margate, mice and maggots” period,’ Ruby said. ‘There was no central heating, no insulation … In the winters, when I lay in bed, I could see my own breath.’ It was the late 2000s and Margate was rapidly gentrifying; when the owner of the flat announced that he was doubling her rent, despite the atrocious conditions, there was little Ruby could do. ‘It’s not like there was any social housing left for my generation. And other private lets were just as expensive. Who could I complain to? What use would it have been?’

Driven in part by the need to pay her rent, Ruby looked for a corporate job and landed one recruiting people to sell medical devices. In time, she earned enough to escape the Margate flat and move to London. She wound up living on one floor of a Chelsea townhouse, and got used to champagne, designer handbags and business class travel. ‘The other tenants were investment bankers and drove sports cars; it was a totally different world from the one I’d grown up in,’ she said. Ruby felt financially secure, and when her landlord – a woman who lived in the South of France and referred to rental income as ‘my pocket money’ – decided on a whim to sell the house, issuing the occupants with a Section 21 ‘no fault’ eviction notice, the sudden awareness of her structural vulnerability as a tenant came as a shock.

Ruby was able to find somewhere else to rent easily enough, but then she was unfortunate in another way: she fell ill, and was eventually diagnosed with a chronic condition that now prevents her from working. With her savings exhausted, Ruby – at 33 years old – now relies on housing benefit to cover her rent (currently issued as part of Universal Credit). ‘It’s been a wild ride. I’ve come from this place of poverty and trauma, then climbed so far up the ladder that I thought I was going to be the next Jeff Bezos, only to then watch most of that privilege being stripped away.’ Her life today is smaller and harder than the one she used to have, and far more dependent on doctors. There are the doctors she sees at the clinic for check-ups, and the doctors at the nearby specialist hospital unit that she needs to be close to in case of emergency. And then there is the doctor who owns her private rental property, a former GP surgery in South London that has been converted into a ‘house in multiple occupation’, or HMO. This doctor is paid more than £1300 a month by the state to accommodate Ruby in a single bedroom with a leaking roof and black mould creeping down the walls. He has now retired to Italy, where he runs a yachting association and posts on Facebook about his golf handicap.

‘I want to shame him so badly,’ Ruby told me. ‘I want to harass him, I want to make his life uncomfortable.’ She has toyed with the idea of revealing the doctor’s ‘outrageous’ behaviour to his former GP colleagues; of searching online to see if she can find evidence of an extramarital affair to embarrass him with; of signing up to the website sendshit.co.uk, which for a small fee will dispatch animal poo (options include cow, donkey and domestic pig) to an enemy of your choosing. She longs to do something, anything, that will upend – even temporarily – the distribution of power between them. But because he currently has the right to evict her with two months’ notice and she can’t risk being left on the streets (with no employment income and a disability, Ruby rates her chances of finding appropriate housing in London’s vastly oversubscribed rental market at near zero), these fantasies remain unfulfilled.

So far, the only outlet she has found for her frustration is Acorn, a community union that tries to help people fight back collectively against those wielding disproportionate wealth and influence in their neighbourhoods – chief among them, landlords. I first met Ruby at an Acorn workshop called ‘How to Beat Your Landlord’. She was wearing a hi-vis jacket and taking part in a role-play, practising techniques for confronting recalcitrant landlords in their offices. A few weeks later, I heard her speak at the Acorn-led occupation of a TSB branch in Tottenham. Acorn claimed that the TSB was entrenching tenant insecurity by insisting that its buy-to-let mortgage customers offer only short-term rental contracts; dozens of branches across the country were targeted by protesters on the same day. In Tottenham, Ruby took the microphone. ‘My landlord …’ she said. ‘This is a man who took the Hippocratic oath, but who now rakes it in by stacking up vulnerable humans in a home riddled with damp. I am so angry. I want to know when we normalised this inherently exploitative behaviour.’

In​ the postwar period, landlords from Peter Rachman – whose name became a byword for racketeering and exploitation in the 1950s – to Rigsby in the 1970s sitcom Rising Damp, were seen in the popular cultural imagination as mean, unscrupulous and cowardly. By the time Thatcher came to power in 1979, they seemed to be dying out: a cross-party effort to make housing a social right had reduced private lettings to only 7 per cent of homes in the UK, and the press was full of talk about the demise of landlordism. In 1974, the Conservative Political Centre (CPC), an in-house Tory think tank, published a pamphlet called ‘The Eclipse of the Private Landlord’. ‘The accelerating decline of the privately rented sector is quite irreversible,’ it concluded. ‘The private landlord, as he exists now and has existed, will, within a generation, be almost as extinct as the dinosaur. There is nothing that can be done about this.’

Nick Bano, a barrister who specialises in housing, sees this prediction as a salutary reminder that the goal of landlord abolition seemed quite plausible in fairly recent memory. ‘But as close as we came to the death of the private landlord,’ Bano writes, ‘we never held up a mirror to that hungry maw’ to check that the beast ‘had breathed its last’. British landlordism has not only survived, but prospered. Today, HMRC estimates that there are 2.8 million landlords in the UK: more than 5 per cent of the adult population. As Bano observes, that’s twice as many landlords as NHS employees, four times the number of teachers, and double the number of coal miners at the industry’s peak. Landlordism is the closest thing we have to a national industry. King Charles is a private landlord. John Lewis is a private landlord. The homelessness charity St Mungo’s is a private landlord. So are many MPs and, as Ruby found out, doctors.

Landlordism has proliferated in tandem with soaring land and property values. A fifth of British homes are currently privately rented (a further 15 per cent are social rentals). Average private rents are at a record high, with the ratio of rent to income in every London borough now categorised as ‘unaffordable’ by the Office for National Statistics. Citizens Advice estimates that 2.7 million households living in privately rented properties – more than half the total – are affected by damp, mould or excessive cold; in 2022, a committee of MPs found that conditions in one in eight private rental homes posed a serious threat to tenants’ safety. The UK’s homelessness crisis is now the worst in the developed world.

There are three different explanations of all of this. The first is that Britain’s seemingly never-ending housing boom – the market value of the country’s housing stock increased by £750 million a day in the decade after the 2008 financial crisis, an upward curve that accelerated sharply during the Covid pandemic before falling back slightly in 2023 after Liz Truss’s short-lived premiership spooked the housing market – is a speculative bubble that must soon burst. The second focuses on the financialisation of housing: its transformation into a commodity that is bought, sold and gambled on in the global marketplace. The promoters of the financialisation theory argue that drawing in an international elite to buy penthouses in Battersea and Mayfair means that rising prices cascade down the housing ladder, all the way to suburban semis in Birmingham and terraces in Middlesbrough. The third thesis, which has become an axiom of contemporary political discourse, is that rising house prices are a product of scarcity: not enough homes are being built, with the result that supply is failing to keep up with demand.

Bano dismisses all three explanations. Property values are not wildly inflated, he insists; rising house prices represent market confidence that these assets will remain profitable in the long term. The financialisation thesis, he claims, approaches the housing crisis the wrong way round. There’s no doubt that UK housing has become a financial safe haven for Gulf sheikhs and middle-class Koreans alike, but the pertinent question is why it is such an appealing investment. The answer, he argues, is to be found at the bottom of the market not the top. He reserves his strongest contempt for the ‘supply guys’ who believe that the solution to our housing troubles is to build more housing. Among the evidence he marshals to refute the idea that more homes mean lower prices is a 2022 report which found that the ballooning of housing costs over the past twenty years has coincided with a growth in surplus housing, as well as census data showing that most British property is underoccupied rather than overcrowded. ‘In reality,’ Bano says, ‘there are plenty of homes to go around.’

Instead, Bano locates the origin of the housing crisis in the relationship between tenant and landlord: an interdependence governed by legal and economic structures designed by the state to maximise rent extraction, and protected by successive governments. His contention is that even though private renters constitute only 20 per cent of households, potential rental yields – whether realised or not – play the biggest role in determining the cost of all residential property. Since there will always be upward pressure on rents because most people need to live near their place of work, many governments (Germany, France, Denmark, Austria, Spain) intervene to limit the ability of landlords to keep ratcheting up their profits, usually by imposing rent controls or guaranteeing tenants some long-term security. For the last fifty years, Britain has done the opposite. The dismantling of postwar rent controls and the creation of assured shorthold tenancies, or ASTs, in the 1980s – part of Thatcher’s project to rescue landlordism from oblivion – granted landlords the absolute right to evict a tenant at the end of an initial rental term. Where once the Rachmans of the world had to send over thugs to intimidate tenants into accepting rapacious rent rises or making way for others who would, landlords are now legally entitled to sweat renters for all they’re worth. ‘The state has now adopted the practices of the 20th century’s most notorious landlords,’ Bano argues, ‘turning them into the fundamental basis of the current landlord-tenant relationship.’

Landlords can’t wring unlimited sums of money directly out of private renters because beyond a certain point no tenant will be able to pay. This has the strongest effect at the lower end of the housing market, where tenants are likely to be spending most of their income on rent. Luckily for the rentiers, that’s where housing benefit comes in. Introduced in 1983, after the government stopped council houses being built and introduced the Right to Buy scheme, further reducing the supply of social housing, housing benefit has come to involve a mass transfer of wealth from the state to private landlords. Today, it costs more than £23 billion a year – just over a third of the UK’s total rental costs – and dwarfs the budget of most government departments. And precisely because this massive injection of money is applied at the bottom layer of the housing market, Bano says, it sets the base price for property in any particular area, pushing up the value of higher-quality homes.

The suggestion that what we have come to call the housing crisis is primarily a matter of price rather than availability has drawn criticism across the political spectrum. Bano’s critics have accused of him of relying on out-of-date and misleading statistics to make his case that the UK’s number of homes per capita is in line with those of countries where housing is more affordable. They also argue that just because Britain’s housing stock exceeds the number of households, this doesn’t mean that more homes aren’t needed (people can’t form a household if they don’t have a house, homes aren’t always of an optimally efficient size and much of the available housing isn’t where people want it to be).

Bano has stuck to his guns, insisting that neoclassical economic assumptions about supply and demand are inadequate in this context – and let landlords off the hook for their role in perpetuating the status quo. ‘I’m gently trying to make the point that it’s all rooted in landlordism,’ he told the leftist Novara Media. ‘I think it’s really useful to make explicit the connection between the profitable private rented sector, the idea of scarcity in the production of new homes, and the kind of ideological co-dependence between the worst kind of “supply guy” discourse and the horrors of the private rented sector as it exists today.’

Supply does matter. Any meaningful solution to the crisis will require the building of some new homes, at least in certain parts of the UK, including in and around London. It’s also true that building those homes without altering the way their pricing is arrived at – and the relationship between those who own and those who occupy them – will make little difference to private renters. UK government research suggests that each 1 per cent increase in the housing stock will eventually produce a 2 per cent fall in average house prices and rental costs. This means that even if 370,000 new homes were built in a year – the Labour government’s target – the average £1750 monthly rent for a two-bedroom home in London would fall only by about £35, while the average deposit needed by a first-time buyer would drop by a few hundred pounds; hardly a game-changer in either case. Bano is right that a pro-housebuilding philosophy – and an associated push for planning deregulation, a mainstay of ‘supply guy’ narratives and central to Labour’s housing plans – isn’t a panacea. He’s right, too, when he argues that Britain is overdue a reckoning with its dependence on landlordism, the political divisions it fuels and the social harms it obscures.

Like Ruby’s​ , Ahmed’s childhood involved upheaval; he was eight years old when his mother took him and his siblings from Pakistani Kashmir to Hertfordshire. By the time Ahmed graduated from university in 2016, the longest fall in real wages since the Napoleonic Wars was underway, and the link between employment and financial security had vanished: 60 per cent of people in poverty lived in a working household. With the ratio of average house prices to income twice what it was in the 1990s, Ahmed knew that to live the kind of independent life previous generations took for granted, he had to be smart. So he became a landlord.

‘There’s a national obsession when it comes to property in this country,’ he said. ‘And when it comes to property investing, there are a lot of things which are going to go in your favour. Properties tend to appreciate in value. You have lots of security as a property owner. It’s not like in other countries, where prices can fluctuate down as well as up.’ Soon after leaving university, Ahmed began renting apartments and subletting them to companies that needed serviced accommodation for temporary workers and were willing to pay a premium for all-inclusive packages. Before long, he had saved up enough to put down a deposit on a former council flat in South-West London, which he swiftly converted from a one-bedroom to a two-bedroom property, increasing its sale value. ‘I then moved on to the next, and the next, and the next.’ Ahmed says that his rental property investment portfolio is now worth nearly £4.5 million.

Dozens of private renters have passed through his properties in the past few years, though he hasn’t met any of them. Their tenancies are handled by letting agents, and Ahmed deals with the letting agents through what he describes as a ‘virtual’ assistant – someone he, again, has never met, who lives and works in the Philippines. ‘I have no idea how a boiler works,’ Ahmed said. ‘It’s a hands-off process. I’m not too fussed about the tenant side of things.’ He spends much of his time making informational videos about property investment on YouTube and TikTok; he has more than 100,000 followers across both platforms. That’s small fry compared to Britain’s biggest ‘landlord influencers’, such as James Coupland, a twenty-something whose Instagram account – ‘From Student Loan to Full-time Property Investor’ – has half a million followers. Most of their content is similar: slickly produced clips with rapid scene cuts and thumping soundtracks, usually portraying the ‘journeys’ of young people like Ahmed, as well as providing practical advice on how to handle everything from buy-to-let mortgages to capital gains tax. Ahmed says that his audience ranges from university students to millennials in their late thirties or early forties: economically speaking, the generationally shafted. ‘The culture of relying on your job for an income has changed,’ Ahmed told me. ‘Now, having a side hustle is the norm.’

On #propertytok there are endless references to the upsides of property investment, and fewer to the risks, of taking on multiple interest-only mortgages, for example. The lives of the tenants are barely mentioned at all. Some of the most famous influencers have been accused of exploitation, pushing their followers to sign up for expensive training programmes, and using libel lawyers to intimidate critics. Ahmed is critical of what he calls the ‘get rich quick’ messaging among some of his peers; his own 32-hour property investment masterclass is freely available on his website, though he charges up to £195 for one-on-one sessions. With supportive, financially comfortable parents (he still lives in the family home), he is honest enough to recognise that much of his success is a consequence of luck and privilege. ‘I’ve been dealt a good hand,’ he said. ‘It almost feels like I’m playing on easy mode.’

Even if property investment is actually beyond the reach of most young people, it’s easy enough to see why they conclude that – faced with a housing system designed to drain them of money and agency – they would be better off on the other side of the divide. For older generations who bought their homes at a time when property was relatively affordable and the welfare state relatively robust, rising property prices have become a means of hedging against all manner of insecurity: the absence of reliable, state-funded social care; the slow-burn collapse of the NHS and other public services; the well-founded fear – driven in large part by the housing crisis – that your children are going to need support in order to obtain financial security.

As Bano points out, one of the ideological planks of the Thatcherite housing revolution was ‘asset-based welfare’ – the notion that the ‘fruits of land speculation’ would no longer be hoarded by aristocrats, but distributed more widely among middle and working-class homeowners in order to help them weather life’s storms as the state withdrew. For many, it worked. And given the rise and rise in rental prices, the UK’s evolution from a property-owning democracy to a multiple-property-owning democracy was inevitable. In some respects, late capitalism has transformed landlordism from an avaricious pursuit to an understandable form of personal insurance.

As a result of the soaring house prices that it fuels, this safety net is unavailable to those who are now most in need of it. As a means of equitably sheltering citizens from harm, an asset-based welfare project that depends on ever rising property values is useless. As a means of locking swathes of the citizenry into the political status quo, however, it’s devastatingly effective. If Britain’s landlords were predominantly giant companies or offshore investment funds, building a popular movement to weaken their power might be feasible. But the proportion of corporate landlords in the UK is estimated by some to be just 5 per cent; the average landlord is a 58-year-old individual, with a median income (not including rent) of £24,000. Karl Marx and Adam Smith once agreed that almost everybody’s interests – workers, industrialists, governments – were aligned against landlords. Yet today most of us, even those of us who rent, are no more than a few degrees of separation away from a rentier, and even closer to an owner-occupier whose financial security is also dependent on landlordism. ‘The fates of landlords and homeowners are intertwined, which means that anyone who does not want to see homeowners suffer must support a lucrative private rented sector,’ Bano writes. ‘As well as desperately needing the cost of housing to collapse, we also need the value of housing to be sustained to avoid a cascade of national and personal catastrophes. We are dependent on our own exploitation.’

Ruby’s entire adult life has been marked by the steady erosion of Britain’s postwar social democratic gains, and the normalisation of what the late David Graeber called ‘the machinery of hopelessness’. For tenants, this manifests itself in the bleak knowledge that Britain is yoked to a form of economic growth from which they are shut out, but also in more personal annoyances: not being allowed to hang pictures, or put a political poster in the window (these prohibitions are common in tenancy agreements). Ruby’s most recent rent rise was supposedly conditional on the building’s damp problem being rectified; but the rise has now been implemented while a solution to the damp problem has not. ‘Because the damp remains, technically we could legally object to this rent increase, but that’s fantasyland,’ Ruby said. ‘I don’t trust the council to protect me from eviction if I kick up a fuss.’

I asked Ahmed, who insists that his own rental properties are well maintained, what he felt about the accusation that landlords are contributing to the stock of human misery – directly, through the provision of subpar housing, or structurally, thanks to their participation in a system that is contingent on the impoverishment of others. ‘Go on to Rightmove and scroll through the pictures of rental properties – there are thousands with no mould, no leaks,’ he said. ‘Most landlords are not doing things which are immoral.’ He went on to argue that landlords are also insecure: if a tenant withholds their rent, he pointed out, a landlord could default on their mortgage repayment and lose their investment. ‘People take a very simplistic view,’ Ahmed said, ‘and think that if we get rid of the people making money then the problem will be solved.’ But for a new housing system to take shape, getting rid of the people making money – or at least challenging the political economy and social legitimacy of landlordism – is exactly the point.

In​ 1915, faced with mass resistance to rent hikes, profiteering landlords in Glasgow attempted to deduct tenants’ debts directly from their pay packets by making claims in the small debt court. When legal summonses were issued, a march led by local women brought the streets to a standstill. ‘Glasgow witnessed a demonstration the like of which had never been seen before,’ the trade unionist and future Communist Party MP Willie Gallacher remembered. ‘From far away Dalmuir in the west, from Parkhead in the east, from Cathcart in the south and Hyde Park in the north, the dungareed army of the proletariat invaded the centre of the city.’ Panicked by the growing militancy, figures at every level of government – from David Lloyd George, the chancellor, to George V – insisted that the landlords back down, lest civil unrest spread. A week later the government introduced a Rent Restrictions Bill.

Community and tenants’ unions such as Acorn, the London Renters Union and Scotland’s Living Rent are the descendants of Red Clydeside’s rent strikers and other 20th-century movements, such as the Stepney Tenants’ Defence League of the 1930s, but they are organising in an almost unrecognisable environment. Laws enabling landlords to sue rental unions for loss of income have made rent strikes effectively impossible. The collective working-class political institutions once capable of binding neighbourhoods together have been hugely weakened, if not dismantled. Acorn’s unapologetically confrontational actions – occupying banks, flooding into letting agents’ offices, naming and shaming individual landlords – work to maximise public attention and make the power imbalances in our communities starkly visible, but they are a product of weakness rather than strength.

Yet housing injustice, unlike most of the social ills afflicting our atomised society, has the potential to unite and radicalise. ‘The housing system is so obviously unfair,’ Bano writes, ‘that many people seem to come to it as something of a gateway to political activism.’ Having knocked on doors for Acorn in Tottenham, I’ve seen how swiftly conversations about damp, mould, Section 21 notices and rent rises can swell into anger at the status quo, and pleasure that someone, anyone, is trying to do something about it.

In the ten years since it was founded by a group of tenants in Bristol, Acorn has managed to stop the mass sale of the city’s council homes, ensure poorer residents pay less council tax, and win tens of millions of pounds of funding for fire safety measures in tower blocks. Following its occupation of the TSB branches, the bank tripled the length of the rental contracts it permits landlords to offer. On some level, as Bano argues, when it comes to the housing crisis, ‘the solutions are already in our neighbourhoods. No one needs to be persuaded about how bad things are, or how unjust. Our task is basically to gather the strands together.’

Durable solutions don’t seem likely to emerge from Westminster. The Labour government’s focus on increasing the housing supply, with mandatory local building targets and construction on so-called ‘grey-field’ sites, will deliver a windfall to land speculators and property developers; whether it will make any difference to renters at the bottom of the ladder is more doubtful. Starmer believes that house building will ‘lay the foundations of real change that this country is crying out for’, but if Bano’s arguments are correct it’s hard to see how. Labour could take a more interventionist approach and at least ensure that profits derived from government alterations to land use are reclaimed by the Treasury – following in the footsteps of the Attlee government, which imposed a 100 per cent ‘development charge’ on any increase in land value under such circumstances. But that sort of policy doesn’t really align with Starmer’s fealty to technocratic managerialism.

Some of the reforms in the Renters’ Rights Bill, currently in committee stage in the Lords, including a ban on rental bidding wars and a cap on upfront rent demands, have been welcomed by housing campaigners. But there is concern that although Labour is abolishing Section 21 evictions, landlords will still be permitted to carry out ‘no fault’ evictions after the first year of a new tenancy if they are planning to sell the property or move in themselves, and there’s no clarity on what evidence will be used to validate their claims (the government says ‘the landlord will need to provide evidence in court to prove the relevant ground applies’). What’s really needed, according to organisations like the London Renters Union, is something that would fundamentally alter the legal and economic structures underpinning the landlord-tenant relationship: specifically, rent controls. Unsurprisingly, Starmer has ruled this out. Forty-four of his MPs are landlords, including the foreign secretary, David Lammy. The biggest landlord in Parliament – the Labour MP for Ilford South, Jas Athwal, who won his seat following a bitter factional battle and the controversial deselection of his leftist predecessor, Sam Tarry – was forced to apologise last year after a BBC investigation found black mould, ant infestations, loose fire alarms and an absence of proper licences in some of his rental properties (Athwal said he had been unaware of the problems; Starmer called the situation ‘unacceptable’, but insisted that Athwal was taking action to put it right).

The housing crisis is too sprawling, too stubborn and too tangled up with other structural problems to be tackled in isolation. It is really a crisis of work, which pays too little; of jobs, which are too concentrated in the financial centres of cities; of public services and welfare system, which are being run down to the point that Generation Rentier relies on rental income to plug the gaps. In 2011, half of the private renters in England were under 35. But with house prices drifting ever further out of reach, the estate agent Savills predicts that demand for privately rented properties among the over-35s will increase eightfold over the lifetime of this parliament; the average age of private renters in England has already risen to 41. Generation Rent is growing up and some of them are having kids: half of all new babies in the UK are now born into rented accommodation, and the number of families dependent on private landlords has more than doubled over the past twenty years. It’s hard to imagine that the collective fury of renters will lay the groundwork for a reorganisation of our housing system around the principle that it should aim to deliver homes of the highest possible quality to the greatest possible number of people, rather than act as a source of passive income to a relatively narrow slice of the population. But it’s also hard to imagine the current system continuing indefinitely.