Tessa Warrington, Waltham Forest Socialist Party
Barely a week in office and new Labour Prime Minister Andy Burnham has already backtracked on support for rent control – a policy that in one fell swoop could lift hundreds of thousands of people out of poverty. Housing Secretary Angela Rayner announced the government would not be capping rents, despite Burnham’s previous support for the policy. He signed an open letter in 2023, as Mayor of Greater Manchester, calling for a freeze on private sector rents, and again this February stated that rent controls “should be on the table” as part of a strategy to combat soaring rents and the cost-of-living crisis.
“England’s private renters face some of the worst affordability pressures in the developed world” – so begins a recent report on rent control published by the Institute for Innovation and Public Purpose. Almost a quarter of UK private renters spend over 40% of their income on rent, rising to almost 50% on average in London. For the bottom fifth of earners, rent accounts for nearly two thirds of household income. The report states that “rents are typically considered unaffordable when they exceed 30%”! UK renters are paying a higher rate of rent than any other country in the OECD group of advanced capitalist countries.
The Renters’ Rights Act, introduced in May this year, does little to address the crisis of affordability. Rents have increased 14% in just the last two years and the Office for Budget Responsibility projects rent rises absorbing all average wage growth until 2030 and beyond. If rents were capped at 20% less today, not only could housing support payments be raised to cover the cheapest 30% of local rents but the government would also save roughly £2 billion a year in spending on housing-related benefits. This would save the average renting household around £2,400 annually, increasing disposable income for the poorest households by 22%.
So why is Burnham’s government ignoring such a win-win policy? Because the losers would be the super-rich landlords. Rayner indicated this when she said that the Renters’ Rights Act was “already having a significant impact on the market”. They may as well come out and say that they are too scared to upset private landlords! These fat cats currently cream off £13.4 billion a year from the government in housing benefit; the highest level of housing subsidisation in the OECD. For a typical landlord paying a mortgage, 20% off rents would still mean pre-tax profits of 70% to 64% – 4.5 times more than the same margin for UK businesses! And for landlords without a mortgage it’d be even higher!
Burnham’s so-called ‘policy blitz’ is currently amounting to the meanest of scraps for workers compared to the huge profits being amassed by the super-rich. If the chokehold landlords have over the rental market is so strong then we need to break it. A mass programme of council house building and the taking into public ownership of the swathes of rental accommodation owned by exploitative mega-landlords is what is necessary. Burnham’s first weeks of premiership, making clear that he wants to cut public spending to pay for increased military spending, show he is unprepared to stand and fight for what’s needed to address the dire financial situation facing the working class, despite his left-wing rhetoric. We need a party that will; one built on struggle, rooted in the organised trade union movement and democratically controlled from below by working people. Real class fighters don’t capitulate to the bullying control of the markets. They get organised and fight back!
