Thu 18 Jul 2024

 

2024 newspaper of the year

@ Contact us

How the housing crisis helped reignite populism and the far right

The role that high housing costs, a growing problem across most of western Europe, has played in fuelling populism is not given enough attention

This is Home Front with Vicky Spratt, a subscriber-only newsletter from i. If you’d like to get this direct to your inbox, every single week, you can sign up here.

Good afternoon and welcome to this week’s Home Front. The run-up to the 4 July general election has taken over, but a story unfolding across Europe deserves attention: the rise of populist far-right politics.

The latest European country to be hit is France. President Emmanuel Macron has called a high-risk national election after the far-right National Rally, a party headed by Eurosceptic and Nato-sceptic firebrands, smashed his party – the liberal Renaissance – along with all other rivals, in the European elections earlier this month.

The role that high housing costs, a growing problem across most of western Europe, has played in fuelling populism is not given enough attention.

Eurostat data shows that across the 27-member European Union, house prices rose by 47% between 2010 and 2022. In that period, rents rose by 18%.

Rising rents and unaffordable property prices impact almost everyone in western Europe, even those on middle to high incomes.

The truth is that these issues are caused by macroeconomic forces such as inflation, rising interest rates, post-2008 restrictions on mortgage lending, and a lack of regulation to prevent asset price inflation.

And yet, the housing crisis that is created at a local level when citizens can’t afford homes is ripe for exploitation by far-right and populist parties.

In 2019, the University of Oxford’s Professor Ben Ansell and his colleague David Adler published a research paper on this very subject. They used granular data at a local level to look at whether housing costs had shaped the EU referendum result in Britain in 2016, as well as support for populist politician Marine Le Pen in France’s 2017 election.

What did they conclude? Areas where people had benefited from high house prices, because they were homeowners who now had assets that were worth a lot of money, were less likely to support populist politicians and more likely to favour the status quo. However, places where house prices had not risen or where there were a lot of renters were more likely to support populist politicians.

Last November, I travelled to Rotterdam to speak about my book, Tenants. I met local journalists and campaigners who spoke of how the far-right had co-opted the story of housing costs and used it to fuel anti-migrant sentiment. Shortly after my visit, in Amsterdam, there were protests about high rental costs.

Housing was a key concern for voters in last year’s Dutch elections. These were won by the far-right Freedom Party (PVV) headed by Geert Wilders, who is openly anti-Islam. Similarly, in Portugal, where there have also been protests about housing costs, right-wing populist party Chega trebled its vote share in March this year.

The Labour Party may currently be leading in the polls, but experts warn that unaffordable housing could yet become a political tool for populist politicians in Britain too.

Links were also drawn between housing costs and alleged shortages by Vote Leave during their campaign for Brexit. More recently, the Conservative Party has coined the phrase “British homes for British people” and Nigel Farage’s Reform UK has pledged to “reform social housing law” by prioritising “local people and those who have paid into the system.”

Reform’s manifesto says: “Foreign nationals must go to the back of the queue. Not the front.”

However, as I wrote in this newsletter a few weeks ago, the relationship between immigration and Britain’s housing crisis is far more complex than politicians on the right make it out to be.

According to latest figures from the Department for Levelling Up, Housing and Communities (DLUHC), 90 per cent of lead tenants living in social housing in 2021-22 were UK nationals. Added to that, the majority of lead tenants living in social homes in 2021-22 were in the “white” ethnic group. Eighty-one per cent of new social housing tenancies went to white people.

So, it’s simply not true that affordable social housing is in short supply because of migration and migration alone.

Vicente Valentim is a postdoctoral prize research fellow in politics at Oxford University’s Nuffield College, where he specialises in populism and the far-right. Speaking to me over the phone from Spain, Valentim explains that “British homes for British people” sounds like “a typical far-right slogan”.

It’s worth noting that populist party Reform have put something similar in their manifesto, which pledges: “Affordable homes for hard-working British people.”

Of the similarities between the Conservatives and Reform UK when it comes to housing, Valentim observes that there is a “general trend in many countries” where traditional political parties “move closer to the right” after populist parties become successful – such as Ukip before the EU referendum.

Indeed, former home secretary Suella Braverman recently said that the Conservative Party should “find a way to work” with Farage and Reform.

Valentim doesn’t think it’s a stretch to say that “over the last couple of years, Britain’s Conservative Party has actually appeared closer to a populist party than it has to a typically centre-right conservative party.”

“Controlling” immigration, as both Reform and the Conservatives are making vows to prioritise, won’t necessarily make housing more affordable or accessible, though. As I’ve reported at length, rents are high because demand is high, and homes are expensive because of mortgage lending and the fact that sellers have an expectation of what their home is worth.

What happens next in British politics remains to be seen. Reform overtook the Conservatives in one opinion poll last week. But one thing is for sure: unaffordable housing costs have already fuelled populist politics in Britain and Europe. Unless action is taken on house prices and private rental costs, the research shows that they are likely to continue to do so.

Key Housing

On the subject of Reform, let’s take a deeper look at their manifesto which was published yesterday. Other pledges of note include:

  • Reform are promising to review Britain’s planning system in the first 100 days of government, providing tax incentives for the development of brownfield sites. Both the Tories and Labour have pledged a brownfield-first approach.  
  • Reform have said they would scrap Section 24 for landlords. Section 24 was introduced by former Conservative Chancellor George Osborne in 2015. It removed landlord’s ability to deduct their costs – including the interest on their mortgage – from their tax bill. Section 24 has widely been credited with reducing the number of private landlords which, depending on your point of view, is either good or bad. Reform wants to restore tax relief for landlords.  
  • Reform have said that they would abolish the Renters’ Reform Bill. This was a landmark piece of legislation introduced by outgoing Housing Secretary Michael Gove. It banned “no fault” Section 21 evictions and made tenancies more secure for renters. Reform would ditch all of this. The Conservatives and Labour have both committed to passing the Renters’ Reform Bill if elected.  
  • Other pledges include more protection for leaseholders but this is thin on detail. And the enforcement of Section 106 agreements – the mechanism through which housebuilders and developers make financial contributions to local authorities when building in their area – but there is no detail on how Reform would achieve this. 

Ask me anything

This week’s question came via X, from a reader who wants to know if I think the Bank of England will cut interest rates later this week – they are trying to remortgage.
 
With the eternal caveats that I am A) a journalist and therefore cannot give you financial advice, and B) sadly not in possession of a working crystal ball, I would say this: economists expect that the Bank of England will keep interest rates at their 16-year-high of 5.25 per cent when its Monetary Policy Committee meets this Thursday.  
 
Why? Economic growth, wage growth and inflation data has all come in higher than expected meaning, the Bank is likely to decide to keep rates – which it has increased to cool inflation – higher for a little longer.  
 
Thank you to everyone who has submitted a question. Please keep them coming to @Victoria_Spratt, on X, formerly Twitter; @vicky.spratt on Instagram; or via vicky.spratt@inews.co.uk. 

This is Home Front with Vicky Spratt, a subscriber-only newsletter from i. If you’d like to get this direct to your inbox, every single week, you can sign up here.

Most Read By Subscribers