Across Europe, the financial sector has pushed up house prices. It’s a political timebomb

Resource, publisher and author context

This resource is an opinion article published by The Guardian and written by Tim White, a research fellow at Queen Mary University of London and the London School of Economics who studies housing, cities and inequality. It examines Europe’s housing crisis through the lens of “financialisation”, describing how financial institutions increasingly treat housing as a high-return asset class rather than basic infrastructure for residents.

Scale of the affordability and security crisis

Across major European cities (from Dublin to Milan), the article reports that rents commonly absorb around half of residents’ incomes, while house price inflation and median rent rises above 10% year-on-year have been recorded in some places. It links these trends to worsening living conditions, including overcrowding and a rapid rise in homelessness, and argues that housing stress is contributing to political disenfranchisement and polarisation.

Growth of institutional ownership and investment

A central claim is that large-scale ownership and control of homes by financial institutions expanded significantly after the 2008 global financial crisis. The article cites that institutional investors managed about $1.7 trillion of global real estate in 2023, up from $385 billion in 2008, and that purchases of residential property in the euro area by institutional investors have tripled over the past decade. These actors include private equity firms, insurers, hedge funds, banks and pension funds, attracted by the perceived stability and returns of European residential property.

Examples from European housing markets

The article highlights high shares of investor involvement in several countries and cities. In Ireland, it states that nearly half of all housing units delivered since 2017 were purchased by investment funds. In Sweden, it reports that institutional investors’ share of private rental apartments has risen to 24%. In Berlin, it cites €40 billion of housing assets held in institutional portfolios (around 10% of the total housing stock). In the four largest Dutch cities, it reports that roughly a quarter of homes for sale in recent years were purchased by investors. It also notes that even Vienna—known for large subsidised housing—has seen institutional investment in every 10th housing unit and 42% of new private rental homes.

Mechanisms that push costs upward

According to the article, investors’ incentives (including fiduciary duties to maximise returns) translate into rent increases and cost-cutting via practices such as “renoviction” (refurbishment used to justify higher rents), under-maintenance, and punitive fees. It provides an example from Stockholm where Blackstone’s acquisitions and renovations were associated with rent increases of up to 50% on some homes. It also argues that “green” retrofits can be used as a pretext for rent hikes.

Policy history and political response

The article traces today’s dynamics to decades of privatisation and liberalisation, including large sell-offs of public housing (for example, a 2006 Berlin transaction in which Deutsche Wohnen bought 60,000 flats for €450 million). It argues that demand-side policies such as liberalised mortgage credit fuelled speculation and household debt, and that post-2008 “distressed” assets created new opportunities for investors. It notes that governments have often weakened tenant protections and used subsidies or tax advantages to attract investment, while public protest has grown (including a cited October 2024 march of 150,000 people in Madrid).