We talk about food poverty and fuel poverty, but almost never about rent poverty. Yet rent is now the biggest driver of inequality in Britain. Thatcher's deregulation turned homes into speculative assets, and tenants into disposable people. It's time for a change. In this video, I explain why rent poverty is central to our inequality crisis — and why Britain urgently needs a new Rent Act.
This is the audio version:
This is the transcript:
Wealth and rents are the issues that I want to talk about in this video. This is the 13th in our series on wealth, and in that series, we've looked at the reasons why the wealthy in the UK have become wealthy.
And one of those reasons is because they own a significant amount of the UK's land. The average person in the top 1% of wealth owners in the UK has total ownership of land worth more than £2 million out of their total wealth of more than £5 million.
You can see that land contributes a significant amount to the wealth of people in this country, if they have a lot of that wealth. If they have very little wealth, then land contributes nothing at all because then they're doing something else, which is paying rents. And that is the focus of what I want to talk about, that transfer of wealth between those who have no land to those who have land through the payment of rent.
And this is a problem because the ownership of land in the UK is highly concentrated. It's most concentrated in Scotland, where a vast proportion of the total land mass is owned by a handful, well, a few hundred people, but throughout the rest of the UK, a minority of people own most of the land and property, and the industrial buildings of the UK as well.
This is an issue because the payment of rent creates poverty in this country. And in fact, that is the overwhelming theme of this video. I'm going to say it again, but I'll do so now. We talk about food poverty in the UK. We talk about fuel poverty in the UK. And I'm suggesting we should be talking about rent poverty in the UK as well, because it's a real issue, and if we are to tackle inequality in this country, we have to talk about rents.
And that's what I want to talk about because rent poverty is very bad. It's at its worst for a long time at present. The average renter in England is now paying 36% of their gross income in rent, and in London, they're paying over 40% of their income in rent. There is unsurprisingly little over for anything else in their lives. No wonder we have people who are angry when so much of their income is being extracted from them by their landlords.
So we have to ask the question. Is there a better way to organise the rental property sector in the UK so that tenants have a chance?
And in this context, we need to go back to something called the Rent Act of 1977. This Act was put in place by the Labour government that was then in power, headed by Jim Callaghan, a Prime Minister who most people have forgotten, but who was, in fact, Prime Minister throughout the entire time that I was at university, so I do remember him quite well, because I was interested in politics even back then.
And the whole point of the Rent Act 1977 was to bring together all previous Rent Acts to make sure that there was one place where we could look to ensure that tenants got a fair deal in life. And that was the focus of this Act. There was a deliberate attempt by Labour, in a way that would be unimaginable now, to rebalance the landlord-tenant equation in favour of the tenant because it had gone too far in favour of the landlord.
What happened was that tenants were given protected rights to the property in which they lived. They could continue to live there unless the landlord did, for example, require it to live in themselves. So there was protection for the landlord, for example, who had gone overseas for a period and then wanted the property back on their return. The whole situation wasn't biased, wholly in favour of the tenant. But in the case of commercial landlords, there were few such protections.
Once a tenancy was granted to a person, and once they had accepted it, and once they had agreed to comply with the rental obligations and actually did so, because, of course, not paying rent was a reason to throw people out of properties, even then, so long as they paid their rent, they basically had security of tenure.
And that it was important because security of tenure is why people want to own homes in the UK now, because they can't get this security any other way apart from finding themselves in a council house, and far too few people can do that.
And security of tenure is the basis of security of much else in life.
It means that you can plan to live in a community.
It means that you can have stable friends, because most people know people in the world around them, and they become their close friends.
It means that their children can stay at the same schools and have continuity of education, which is vital to their development.
It means that their children can have the same friends as they grow up. And again, there's a lot of evidence to suggest that this is quite important. The fewer disruptions there are to a child's education, the more likely it is that that education will be successful.
Security of tenure was the focus of what Labour provided in 1977.
And they did something else as well. They said that tenants should pay fair rents, and there were rent officers whose job it was to determine what a fair rent was. And a fair rent was not one that took into consideration the scarcity of property. It was one that took into consideration the balance of risk and reward for tenants and landlords to make sure that the landlord got sufficient to cover the costs of providing the property, but they didn't make an excess return because the value of the property was rising in the market, which the tenant had to compensate the landlord for. So, excess pricing due to property value increases was ruled out. And this was, again, essential because people shouldn't be required to pay for their landlord's profit.
But come 1979, Labour was out of office, and what then happened was that Margaret Thatcher decided that she could no longer face the things that the Rent Act 1977 delivered.
She didn't like the protection that it provided for the tenant against eviction and rent hikes.
She didn't like the predictable, affordable rents for ordinary households that it provided.
And she didn't like the fact that private renting could, in fact, deliver secure long-term housing for people. She wanted the opportunity for people to make speculative profit from renting once more.
And in 1980, she introduced an Act that got rid of some of the provisions of the Rent Act 1977. She introduced the concept of short-term tendencies, but it was in 1988 that she really overthrew Labour's Rent Act. In that year, she passed another Act, and in this Act, she basically threw out all the protections that the Rent Act 1977 provided.
She decided to rebalance that equation again. She balanced the equation in favour of the landlord and against the tenant, and nobody has ever taken any steps ever since to redress the resulting inequalities that have arisen.
Rents were deregulated.
The rent officers disappeared.
And short tenancies became the norm for periods of six months or so onwards, and it's now normal for no tenancy to be for a period of longer than 12 months, although of course they can roll onwards, but the opportunity to evict was made much easier, and that has become the case ever since.
The reality is that homes were, as a consequence, turned into houses, and they weren't places for people to live. They simply became investment vehicles. Tenants became, as in every case in neoliberal economics, disposable, as all people are considered to be within that philosophy.
Insecurity was normalised.
Artificial scarcity became a factor in the determination of rents.
Tenants had to compensate landlords for the fact that the value of the property had gone up through no action on the landlord's part. Indeed, the landlord could ignore the property and still make a gain, and the tenant had to pay for it with upward-only revisions in the rents that they had to pay.
Unsurprisingly, this contributed to the surge of inequality that we saw in the 1980s and through into the early 1990s as a consequence of everything that Thatcher did. Property wealth skyrocketed. It became the normal subject of conversation in middle-class dinner parties - the curse of the middle class, as I would describe it - and those people became obsessed with property price increases and owning as much property as possible as a consequence. The era of the buy-to-let landlord was created. By the end of the century, it was becoming commonplace.
People were looking to put their money into property rather than into pension funds, and rather than into investment in real productive activity in the UK.
We lost our productivity.
We lost our future.
We gained a landlord class, and we saw exploitation through rent increases happening yet again. And the consequence I've already noted is levels of rent in London and throughout the UK, which are so high that people are basically being put into what I call rent poverty.
This was the consequence of Thatcher's deregulation. Now rents, quite deliberately, transfer income from a large number of people who live in rental property, and very many millions do, to the few who own these properties. There is a concentration amongst landlords. Of course, nobody who rents owns more than one property, and indeed, they might not occupy even the whole property because multi-tenanted occupation is now becoming normal, and so we see this massive disparity in power developing. And power, of course, is a fundamental element in the determination of the fair rewards inside political economy.
So, tackling rising rents is central to tackling wealth concentration if that is what we want to do. We can't just tackle wealth concentration through increasing taxation. That's an after-the-event reaction to the rising power of the wealthy. We have to tackle wealth before it goes out of control, and this means that we need a new Rent Act.
We need to restore security of tenure for many more tenants. I'm not saying it needs to go back to where it was in 1977. Maybe the balance swung too far at that point, but we need to ensure that as many people as possible can be certain that they can live in accommodation for the long term.
So the 12-month rental periods that many people have now are far too short. Rental periods to me need to be much longer.
There needs to be a way of reviewing fair rents, and these might need to once again be subject to independent assessment.
And there needs to, therefore, be a rebalancing of power between the tenant and the landlord.
And we need to ensure that homes are used as such, and are not used as speculative assets.
If we did, we would rebalance the wealth in our society.
One of the major causes of anger that exists today would be removed.
It isn't inevitable that we should have rent crises in the UK.
Rent poverty is not necessary.
If we did tackle rents and controlled them properly, we would reduce wealth concentration in this country.
A new Rent Act is overdue.
A government that was really worried about the anger in communities in the UK would deliver this.
A government that was really worried about tackling the rise of neo-fascism in the UK would deliver this.
If we don't, we are going to see growing anger, growing wealth inequality, and a failure of our communities.
This is fundamental. Tackling our rent crisis is essential if we are to build a sustainable future in the UK.
What do you think? Do you think we should reintroduce rent controls? That's what we're asking in today's poll. Have a look at it. And let us know your view.
Poll
What should the UK do about its rent crisis?
- All of the above (79%, 250 Votes)
- Reintroduce rent controls (10%, 32 Votes)
- Build more social housing (6%, 19 Votes)
- Leave things alone (4%, 13 Votes)
- Strengthen security of tenure (1%, 3 Votes)
Total Voters: 317
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One suggestion might be that we need controls on Land Ownership and in particular restrict the number of ‘residential properties’ an individual or company can own.
Worth pointing out one of Britains biggest private landlords had to be bailed out by their lenders because they owned so many properties that the effect of ‘repossessing’ them would crash the local property market…….
As a small landlord myself , by far the most important thing is to have happy tenants that want to stay for the long term. We have offered longer contracts at 20 percent below the supposed going rate, but surprisingly most are happy with a one year rolling contract, one for nearly 15 years now. Voids of tenancy and all the associated costs are what I fear more than rent controls.
Ps, I voted all of the above.
Good for you John. Nice to see a landlord who is not complaining about being forced out of being a BTL ‘entrepeneur’ by some tweak to the taxation system.
I agree with your analysis; we do need more secure tenure and fair rents.
Fair rents should not simply increase when the market value of the property rises; landlords already gain from that, in the long run, through capital gain (which should be taxed).
But, perhaps we need a bit more. Perhaps we should tax landlords on the value of their rental properties (both private and company landlords). As you have often said, since rentier landlords are socially undesirable, we should discouraged this through taxation.
BTW, it does seem counterproductive to not give private landlords mortgage tax relief when this is available to company landlords. That just pushes rentals into the corporate sector which doesn’t seem wholly desirable. Perhaps a rental property tax would be an appropriate replacement.
The other thing that I think should happen is that the government should set up its own housing rental company, to compete with landlords, and put a ceiling on rental costs. I guess this is what housing associations should be but they are clearly failing in this regard.
There are, after all sufficient properties in the UK (see https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-landlords-surprisingly-simple-solution-to-uk-housing-crisis), it’s their distribution that is wrong.
So, first move towards correcting the maldistribution if houses via taxation (including of second homes). And set up a competing government company to move towards correcting the market. And whilst it is necessary have a new Rent Act as you suggest.
This is an idea I am goinng to get to…..
Why a gov company? Just let councils build housing with cast iron legislation that they cannot sell them
OK
What nonsense all these Conservative and Labour governments pretending they’re running cost-effective administrations when they can’t even run the proverbial whelk stall when it comes to providing homes for people to live in:-
https://www.theguardian.com/society/2025/sep/01/england-councils-private-landlords-incentives-homeless-families
Too busy themselves or allowing their chums in Parliament to run Buy2Let businesses. Corruption is rife in these two parties!
EuropeanPowell has made a couple of posts today exploring and critical of this:
https://europeanpowell.substack.com/p/labours-housing-scandal-how-ministers and
https://europeanpowell.substack.com/p/the-31m-scandal-the-guardian-wont
One of the most essential domestic reforms. It is what a progressive party should be advocating.
What of Housing Associations? Should they go back to Local Authority Housing Departments?
In my opinion, yes. They have become rent seeking activities for their bosses, IMO.
I agree with much of this, particularly your analysis that homes have become investment vehicles rather than homes to live in and this has massively distorted our economy and society. I think though that this started in the 70s before Thatcher. Her policies exacerbated it for sure, but I think the inflation of the 1970s undermined people’s belief in money so they began to save in houses not pounds. I remember we as a young graduate couple n the early 70s being advised to get the biggest mortgage we could and buy the best house we could afford. We did, as did a lot of our contemporaries, who now sit on vast housing wealth in part paid for by inflation. Some of my generation then doubled down and bought more property, not considering the effect on the younger generation. The idea has been cemented in people’s minds that the way to wealth is through property not investment in skills or good businesses. It has been further encouraged by property porn TV. Really in my generation you were better off learning DIY home skills and doing up property in your spare time than climbing the career ladder. This is now ingrained in our national psyche and I don’t know how we get rid of it, but I am sure that lack of trust in the currency and the financial system is what started it off.
As with so much else, the UK needs to look both back to the time when it had a working welfare state, and to its neighbouring countries, most of which have regulations like the 1977 Rent Act – and better housing.
This is true in so many areas – public ownership of utilities and transport, higher education, price controls, financial regulation and a mutual finance sector, etc, etc…
The fact is that the UK took a wrong turn in 1979 (the election of Thatcher), and needs to turn back.
I agree with most of that.
However, you don’t mention social housing except in the following poll. In my (long-lost) youth there were stacks of local authority homes and, as far as I remember, no such things as housing waiting lists. As a local authority lawyer, my father could easily have afforded to buy but chose to rent. In the fifties he rented one of the council houses that appeared during the post war years but eventually he moved us to a leafy suburb and a privately-rented property. I don’t know what the rent was, but I doubt if it was substantially more, especially as he had my education to pay for. He ran a car, my mother didn’t work, and we had lovely holidays, albeit always in the UK.
The point I am trying to make is that what we need is more local authority housing, when the rents charged by private landlords would have to come close to those of social housing otherwise they wouldn’t let them. It’s a matter of supply and demand. Then there would be no need for rent controls. So I was one of the few who voted for more social housing.
Point accepted, Nigel – but it was mainly about wealth and rent controls.
Spicla housing is obviously needed.
I don’t agree about LA Housing, Nigel. We were homeless in 1970, family with 3 children. LA did not want to know and we had been on the waiting list for a year before becoming homeless.
I’m really sorry about that, Cindy. I do agree that even in the fifties there were not enough LA homes to go round. Even so, my point stands that if there is sufficient LA housing at controlled rents, the private sector has to follow suit.
Agreed.
But which parties are likely to do what is needed?
Labour – The Renters’ Reform Act is currently going through parliament. It was held up by Tories in the House of Lords.
https://www.bigissue.com/news/housing/renters-rights-bill-lords-third-reading/
It doesn’t address at all the question of affordability.
Labour’s Lisa Nandy has rejected the idea of rent controls, describing it as a “sticking plaster on our deep-seated problems”.
https://www.bbc.co.uk/news/uk-politics-66042341
That’s not what she said when in opposition, where she was “interested” in rent controls.
Tories — No.
Reform — No chance at all.
At the last election, Reform was the only party that supported a retention of the current act, including no-fault evictions. If they got in power, any rights gained by tenants under the Renters’ Reform Act would be quickly taken away.
As part of their proposed changes to taxation, they would lift the stamp duty threshold significantly. Which usually leads to higher house prices and rents.
https://www.bbc.co.uk/news/articles/cqll1edxgw4o
Lib Dems — Yes — Sort of.
“Renters need a fair deal, including finally ending no-fault evictions, extending the length of tenancies and ensuring rent can only increase by a fair amount each year.”
https://www.libdems.org.uk/news/article/tackling-housing-crisis
Greens — Yes.
“ In particular, we need a national system for rent controls with local flexibility aimed at bringing rents down relative to incomes.”
https://greenparty.org.uk/2024/10/09/greens-say-renters-rights-bill-must-go-further/
The Corbyn Party—Wait and see. In 2019 Corbyn said Labour would not allow private rents to go up by more than inflation if it won power.
Right now, of the parties that support such measures, the Greens are the only ones who use the words, rent control.
Polls give them 5 to 8% of the vote.
Reform, who would turn tenants into walking cash machines for landlords, 30 to 35%.
Go figure.
Much to figure. Thank you.
Very good idea to try to get ‘rent poverty’ recognised – it ought to be obvious. Labour’s Rental Rights act 2025 has improved security of tenure , but although rent reviews can only happen once a year – there still seems few limits on the scale of the increase. It outlaws ‘bidding wars’ but rent increases can still reflect ‘the local market’.
Thatcher’s ‘property owning democracy’ initially increased owner occupation, but now that so many of those ‘right to buy’ houses which were in council ownership are now often part of a private landlord empire.
‘Social housing’ needs to be boosted – private developers have effectively avoided their so called obligations in their development agreements.
I grew up in a really grotty private rental flat in the 60s/70s. The landlord was awful, but I remember every year when they wanted to put the rent up my parents would go to the rent tribunal who would restrict how much they could. Maintenance was not great but we had a long term secure tenancy.
It is obvious we need rent controls back, especially given how many more rent privately on insecure tenancies. Having grown up in a rental property I don’t share the belief that home ownership is vital, but I do think rent controls and secure long term tenancies are. Most European countries have much better housing than us, but with good legislation to protect renters and less obsession with home ownership.
Thanks.
And glad you agree.
Totally. Current housing policy has been dominated by home ownership with a smattering of so called affordable homes. No mention of social housing or strategy around what is really needed. In the 60s and 70s there was a coherent policy of trying to build decent homes people needed and whilst they got a lot wrong, at least they tried.
I agree that rent poverty is a serious problem but I query why so many solutions boil down to attacking private landlords.
As long as social housing is inadequate we need more privately-provided housing, not less, and taxing the landlords and reducing their income will produce the perverse consequence of less housing at, ultimately, higher prices. A better solution would be to increase social housing to a point where all rents, private and public, become affordable.
Furthermore, I empathise with the desire of small landlords to have a dignified retirement income that is inflation-resistant and not dependent on the charity of the state.
Control profiteering by all means, but in my view much of the commentary on this issue is driven by envy and resentment rather than a genuine plan to produce affordable housing and secure tenure.
Very politely, I look at the issue as one of macro concern, not poettiness as you very obvuously do. And from that perspective we have the policy wrong, so I am saying so, and offer one of the solutions. The only person who brought jealousy into it was you. That is your issue, not mine.
I agree entirely. I was at university in 1977. Sadly Jim Callaghan is remembered only ( and wrongly in my view) for the so- called winter of discontent. In my 45+ years as a lawyer in planning and related areas I visited hundreds of rented properties and the conditions I viewed were, in too many cases, appalling. “Squalid” would be too complimentary. Over the years I have seen conditions deteriorate and the lack of security meant tenants had no ability to complain. Many of the landlords – property investors – were simply callous and motivated by greed.
Thanks
Hope it’s not too late to say this is heartwarming and brilliant.
I think Health and housing were once under one government department, it’s so obvious why !
Thanks