Across the United Kingdom and much of the developed world, the cost of keeping a roof overhead has become a daily source of anxiety for millions. In London, it now takes the combined earnings of four people just to afford a two-bedroom apartment, a staggering metric that speaks volumes about the state of housing in 2025. According to recent analysis, about one quarter of London’s population—and one in three children—are living in poverty, struggling to meet even the most basic of living costs. The high price of housing is not just a London problem, nor is it confined to the UK; it is a global crisis, mirrored in cities from Paris to Tokyo, and echoed in the swelling ranks of the world’s informal settlements, where over a billion people reside in precarious conditions.
How did we get here? The answer, as traced by multiple sources including Fair Observer and the World Socialist Web Site, is rooted in decades of economic and political decisions that have prioritized private profit over public need. Since the late 1970s, successive British governments have overseen the sale of around 10% of the nation’s land area, a process that began in earnest under Prime Minister Margaret Thatcher. Her administration’s sweeping privatization program saw state-owned enterprises and vast tracts of public land sold off at bargain prices. Water, electricity, coal, and the railways were all transferred to private hands, with the new owners often selling land to finance dividends and loans, thus creating a new source of income in the form of ground rents.
The impact was profound. As reported by the World Socialist Web Site, between 70% and 75% of housing costs in Britain today reflect the price of land, a dramatic leap from just 2% in the 1930s. The real estate sector’s Gross Value Added soared from £40 billion in 1990 to £270 billion in 2024, overtaking even the financial sector as the single largest contributor to the UK’s economic growth. Yet, this growth has been anything but inclusive. The benefits have flowed overwhelmingly to a small elite, while the majority have faced stagnant or declining living standards.
Central to this story is the Right to Buy (RTB) scheme, launched by Thatcher’s government. Under RTB, public housing tenants could purchase their homes at discounted rates. Over two million homes have been sold under the scheme as of March 2025, generating between £70 billion and £80 billion in revenue. But rather than reinvesting these funds into new public housing, the money was funneled directly into the Treasury. The result? A dramatic depletion of the public housing stock and a surge in private rentals. More than 40% of public housing sold under RTB in England is now being rented out privately at market rates—an astonishing 86% in Brighton, 73% in Milton Keynes, and 59% in Dover.
For those unable to buy, the options have only grown more bleak. Private rents have soared by 1,000% in real terms since the late 1970s, far outpacing wage growth, which has increased by only 35–45%. The average UK private sector rent now stands at about £1,350 a month, more than triple what it was four decades ago and even higher in London and the South East. Meanwhile, social housing rents, while lower, are increasingly out of reach for many, especially as unemployment, disability, and low wages force reliance on Universal Credit or Housing Benefit. Housing Benefit itself, created in the early 1980s, has been phased out for many claimants since 2013 and replaced by Universal Credit, further straining the safety net.
What about the promise of a "property-owning democracy"? Despite the rhetoric, the percentage of owner-occupiers in the UK is just 63%—only slightly higher than it was in 1979. The RTB scheme, far from democratizing property, has instead fueled the rise of a rentier class. Corporate landlords, buy-to-let investors, and small-scale private landlords now dominate the rental market. According to the English Private Landlord Survey 2024, 92% of private renters are tenants of small landlords, many of whom are pensioners or individuals supplementing their income amid rising inflation.
The consequences of these policies are stark. Wealth inequality, as measured by the Gini coefficient, has climbed from 60% in 1979 to nearly 70% in 2025, driven primarily by housing and land price inflation. Income inequality has also risen sharply, with the Gini coefficient for income increasing from 25–28% in 1979 to 34–36% today. The bottom half of households now have little or no financial assets, while the top decile enjoys an ever-larger share of the nation’s wealth. The shift from universal to means-tested welfare, combined with regressive tax policies and the shredding of the social safety net, has left many families deeply indebted. Household debt, including mortgages and unsecured loans, has surged from less than 30% of income in 1979 to around 120% in 2025.
These domestic trends are mirrored by broader economic and political instability worldwide. As Fair Observer reports, the UK is not alone in facing division and stagnation. Decades of sluggish growth and rising inequality have left citizens frustrated across the globe. Japan, for example, is grappling with inflation of 3.2% and a doubling of rice prices, triggering political upheaval and the resignation of Prime Minister Shigeru Ishiba—the fourth prime minister in just five years. France, meanwhile, is mired in a fiscal crisis, with a budget deficit of 5.8% and debt at 114% of GDP, leading to five prime ministers since 2022 and a wave of street protests. In the UK, the economic shocks of the 2008 financial crisis, Brexit, and the COVID-19 pandemic have fueled political unrest, including a recent far-right protest in London involving 150,000 people.
These crises are not confined to the developed world. In Nepal, Generation Z has led protests against corruption and inequality, following similar unrest in Sri Lanka, Pakistan, and Bangladesh in recent years. As Atul Singh and Glenn Carle note in Fair Observer, today’s economic stagnation and cultural anxiety bear striking parallels to the revolutions of 1848, when agricultural failures and nationalism sparked uprisings across Europe. The concentration of wealth since the 1980s has only amplified public anger. In the US, for instance, 1% of the population now controls 40% of the wealth, while the bottom 80% hold just 10%.
The recurring theme is unmistakable: economic pain is destabilizing political order worldwide. In the UK, the housing crisis is both a symptom and a driver of this broader malaise. The unchecked rise in land and housing prices has fueled inequality, hollowed out the state’s asset base, and left millions struggling to afford a place to live. As successive governments have legislated and regulated for the benefit of the rentier class, the dream of secure, affordable housing has slipped further from reach for ordinary people.
As instability becomes the new normal, from London to Kathmandu, the urgent need for systemic change grows ever more apparent. The fate of housing—and, by extension, social stability—hangs in the balance.
