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

This article, published by The Guardian on July 7, 2025, addresses the escalating housing crisis across Europe, highlighting how the financial sector has exacerbated housing affordability issues. The author, Tim White, a research fellow at Queen Mary University of London and the London School of Economics, argues that the increasing dominance of financial institutions over housing markets threatens basic human rights, such as access to affordable housing.

The housing crisis is described as a significant threat to the European Union, comparable to geopolitical tensions with Russia. Cities like Dublin and Milan report that residents spend nearly half of their incomes on rent, while home ownership is becoming increasingly unattainable. Major urban centers are experiencing dramatic increases in house prices and rents, with some areas seeing year-on-year rent hikes of over 10%. This situation has led to rising homelessness and precarious living conditions, contributing to political disenfranchisement and fueling support for far-right parties across Europe.

The article illustrates how the financial sector has shifted power dynamics in housing markets, with a dramatic increase in institutional ownership since the 2008 financial crisis. In 2023, institutional investors managed approximately $1.7 trillion in global real estate, a significant increase from $385 billion in 2008. In countries like Ireland, nearly half of all new housing units since 2017 have been purchased by investment funds. The dominance of these investors has led to increased housing prices, as their primary obligation is to maximize returns for shareholders.

The growing influence of financial actors has resulted in a deterioration of living conditions for renters. As rents increase, many tenants face eviction and displacement. Investment funds have been accused of practices like “renoviction,” where property renovations are used as a pretext to raise rents. The article notes that housing has become a critical engine of inequality, disproportionately affecting minority groups and low-income tenants.

Governments across Europe have weakened tenant protections and reduced regulatory standards to attract private investment, often at the expense of residents' rights and housing stability. Despite calls for action, such as protests in Madrid where 150,000 individuals demanded affordable housing, political responses have been inadequate. The article cites examples of failed policies to impose social housing targets, highlighting the struggle against the influence of real estate capital.

The article concludes that the current system, which prioritizes profit over social need, is unsustainable and must be reformed. The authors call for fundamental structural changes to reclaim housing from financial interests, emphasizing the need for housing to be recognized as a public priority. As the crisis deepens, housing will continue to be a pivotal issue in European politics, necessitating urgent attention and action to ensure sustainable solutions for all residents.