The private rented sector: Broken for all or working just as intended?

The private rented sector, a touted safety net for many, is supposedly designed to allow those unable to afford a home to still have somewhere to live. 

This promise, however, does not match reality. We live in a country with more than enough homes for everyone to live in, yet many are not afforded the opportunity. Renting was supposed to provide the answer to the problems of affordability and accessibility. Yet, it seems to have failed spectacularly, reversing course entirely and now focusing far more on profits for landlords than on creating an accessible housing option. 

This trend is especially apparent among our generation and the one before us – the new buyers trying to get onto the housing ladder. Recent official statistics reveal that 40% of people aged 16-34 are now living with their parents, which equates to 6.7 million. 

The renting market is not ‘broken’ but working exactly as it was designed, to make landlords richer

But how did this come to be? How has something purposed for allowing greater accessibility to the market now become something that does the exact opposite? 

We must first look to the evident starting point of this crisis: Margaret Thatcher and her mass deregulation of the private rental market, a market that, at the time, was nearly dead due to the competition of social housing and a cheap housing market. 

When we evaluate the reasons behind these reforms, the answer to our question becomes readily apparent: this system was designed to ensure that “the letting of private property will again become an economic proposition”. And as such, the renting market is not ‘broken’ but working exactly as it was designed, to make landlords richer. 

This is a market that is enabled by, and indeed used by, those in the heights of political power – 85 current MPs are landlords, and at least 134 peers in the House of Lords are too

The impact of this has been calamitous. In the UK now, nearly one in every 21 adults is a landlord, and there are four times as many landlords as teachers. This has led to a housing market that continues to increase in price and is seen as an investment for many. The market for homes has become a soulless price-gouging enterprise where landlords exploit their tenants for every possible penny and evict those who are paying less to attract those who pay more. A situation severely worsened by Section 21 no-fault evictions and the vicious abuse of them. 

This is a market that is enabled by, and indeed used by, those in the heights of political power – 85 current MPs are landlords, and at least 134 peers in the House of Lords are too (a number likely to be far greater due to the nature of hidden trusts). And thus, it should not be surprising, considering both this reality and the neoliberal start that the market was given, that we, as a country, have some of the worst renter protections in the world. 

However, it is no longer just individuals serving as landlords within the UK market – we are now seeing a significant influx of corporate landlords, with some of the largest corporations buying up large chunks of housing. In fact, the number of buy-to-let companies in the UK now exceeds 400,000, and companies such as BlackRock, Legal & General, and even Lloyds own large rental portfolios. This only continues to drive prices up, and, likely, the corporatisation of the housing market will only intensify the exploitation of renters. 

We could return to the systems which were working before the rental market’s revival under Thatcher. Social housing is the most important of these

The government is now seemingly trying to rectify the exploitative aspects of the renting market with the Renters’ Rights Act. The Bill would place regulations upon landlords to try and weaken their abilities to exploit their tenants, with the most important of all being the ending of Section 21 no-fault evictions (which are the leading cause of homelessness in the UK), a change that is an undeniable step in the right direction. 

But the bill does not go far enough, especially in terms of reducing prices from their current soaring heights. In fact, the bill itself entirely ignores issues of price and the ability of landlords to practically evict tenants through suddenly hiking rents. 

If we can’t trust those landlords who view homes as an investment to provide affordable housing, what are the alternatives? 

Both Adam Smith, a founding capitalist thinker, and Karl Marx, the founding figure of Marxism, both agreed that everyone’s greater good is aligned against the exploitative parasitic economic deadweight that landlords represent

We could return to the systems which were working before the rental market’s revival under Thatcher. Social housing is the most important of these, as it can provide people with secure homes from which they can genuinely set themselves up for the rest of their lives. 

Indeed, in terms of a better economy for all, many, including the Green Party, would seek to vastly reduce and even possibly abolish the private rental sector entirely. In fact, it should be noted that both Adam Smith, a founding capitalist thinker, and Karl Marx, the founding figure of Marxism, both agreed that everyone’s greater good is aligned against the exploitative parasitic economic deadweight that landlords represent. 

Change is needed. The rental market is designed to create profit for the few by treating homes as investment assets. Ultimately, we need a system that recognises houses as homes and allows true accessibility to return to the market.