In the UK, homeowners tend to accumulate wealth while those unable to get on the property ladder are left behind. This fuels the racial wealth divide. But does the UK housing market also erode the health of those left to suffer the exploitation of the rental sector, ask Stephen Walcott and Serena Robinson?
“Health is wealth”, as the popular Roman proverb goes. Its meaning is admirable – that good health is more important than material or financial prosperity. But we know how wealth and the conditions in which we live affect our health.
When the first Secretary of State for Health was created, following the Ministry of Health Act 1919, housing was included in the Minister’s brief. In 2024 however, the close connection between health and housing couldn’t feel more distant…
Housing and the racial wealth gap
Falling victim to an obsession with privatisation and deregulation, we have a two-tier housing system in the UK where some benefit from homeownership – they can accumulate wealth and are generally more healthy – while others are exploited by a rental sector which drains wealth and erodes health. Predictably, working-class communities of colour disproportionately occupy the latter group (Figure 1).
Figure 1: Housing tenure by ethnicity in England and Wales (2021)
At a household level, the wealth held by the average White British household (£332,300) is ten times that of a Black African household (£32,400) and nine times that of a Bangladeshi household (£36,400). At an individual level, the average person of Bangladeshi heritage holds 27 times less wealth than the average White British person (Figure 2).
Figure 2: Median individual wealth by ethnicity, April 2018 – March 2020 (£)
By disproportionately impacting communities of colour, the housing crisis has driven these racial wealth gaps. People of colour are less likely to own a home and hold property wealth due to a combination of historical, geographic and socioeconomic barriers. Hence the median property wealth of Black households (Black African and Black Caribbean) stands at zero, compared to £115,000 for White British households and £176,000 for Indian households. Similar disparities are evident in London, where the median total household wealth for Black and minority ethnic households is £87,200—six times lower than the £524,100 median wealth of White British households.
The role of housing in the vicious cycle of poverty and ill health
Wealth inequalities are both a cause and a symptom of the housing crisis. And those with less wealth face the double injustice of not only having less of a cushion to withstand hardship, but also fewer opportunities to live a healthy life.
To untangle the complex relationship between housing, wealth and health, we can start with a couple of key observations…
(i) Housing poverty directly results in ill health
The UK’s broken housing system has led to 43% of social renters and 35% of private renters living in poverty after housing costs. Around a third of social and half of private renters only fall into poverty after housing costs, suggesting they are pushed into poverty by the price of rent. Private rent prices have risen significantly in recent years, much faster than wages. Again, people of colour are far more likely to be in poverty, particularly after housing costs (Figure 3); also contributing to this picture are labour market disparities, driven by racial discrimination, that entrench poverty and financial instability, making the prospect of saving for a house deposit out of reach for those most marginalised.
Figure 3: Proportion of individuals living in poverty and deep poverty by ethnic background of household head – after and before housing costs (AHC and BHC) (%)
Turning to health outcomes, nearly a third of people on the lowest incomes self-report “less than good” health compared to 12% of those on the highest incomes. This disparity is in part due to fuel poverty from which resulting cold, damp and mouldy homes can cause respiratory and circulatory conditions and poor mental health. Poverty also pushes people into food insecurity, causing malnutrition, while the mental toll of financial precarity also cannot be understated.
(ii) These desperate conditions are caused by structural factors
The lack of regulation in the rented housing sector has created widespread inhumane living conditions, deteriorating people’s physical and mental health. Around 1 in 4 private rented homes in England are classified as “non-decent”. The fuel poverty mentioned above is exacerbated by poor ventilation, insulation and efficiency, which, as well as causing cold homes, can risk overheating in hot summer months. The devastating death of Awaab Ishak, a two-year-old child, was caused by black mould in his family’s housing association home, and it was later uncovered that his parents’ complaints were ignored due to racist assumptions.
Meanwhile, the privatisation of some UK housing bodies has contributed to nearly 2000 social houses having flammable external cladding, uncovered since the Grenfell Tower tragedy where 72 people died, 85% of whom were people of colour. This points to systemic failures and structural racism.
An important consequence both of these sets of factors – housing poverty and the structural set-up of the UK housing market – is overcrowding. Three quarters of families in overcrowded conditions suffer direct health impacts including a heightened risk of accidents, infectious diseases and condensation leading to respiratory issues, while for children, an overcrowded home is related to worse school attainment. In March 2023, Mizanur Rahman, of Bangladeshi origin, died after a house fire in London where he was one of 19 people living in a two-bedroom flat, bringing to light the role of “hostile environment” policies in driving these conditions.
All of these impacts are both caused by the mismanagement of the UK’s housing system and perpetuated by the imbalance of supply and demand. As stated above, rent prices have soared in recent years, causing significant stress for tenants but also limiting the disposable income available for health-improving behaviours. Exacerbating these stress levels further is the ever-looming threat of a no-fault eviction or a tenancy not being renewed, creating unhealthy levels of insecurity. Ultimately, for many people, falling into temporary accommodation or homelessness, and its devastating health impacts, is too close for comfort.
How can we reverse the cycle of poor housing, poverty, and ill health?
Reversing racial wealth and health disparities will require bold change, a substantial power shift and significant, long-term investment. For those already suffering the consequences of the rental sector, we clearly need far more social and affordable housing, more regulation of private landlords to control rents and to address substandard conditions, an overhaul of tenant rights, and adequate reform of social security for those already in housing-related poverty.
Often overlooked is the intergenerational impact of disparities in homeownership. Those who do not own a home have far less wealth to pass onto their kin, meaning that younger generations, disproportionately from communities of colour, will be pushed into the rental sector. Without a redistribution of wealth and a fairer inheritance tax, racial inequalities will only become further entrenched.
But we must also think beyond the short term, and rethink housing more broadly – viewing home ownership less aspirationally and certainly not as an asset for wealth accumulation. The UK should learn from Vienna where social housing is not stigmatised and in fact where most residents live. They are owned by the municipal government or by state-subsided not-for-profit cooperatives, built with environmental sustainability and climate change in mind, and created with community at their heart. Residents often have lifelong, affordable tenancies which, coupled with rent caps, provides security and power. Homeownership naturally therefore becomes less aspirational, but, ultimately, the right to safe and secure shelter has not been deteriorated.
So, health is indeed wealth, but health is too often absent without wealth. That needs to change. Wealth inequality will not solve itself, and a big step to addressing these imbalances is to tackle the root causes of housing disparities. Otherwise the cycle of poor housing, poverty, and ill health will continue to entrench itself, deepening inequalities and robbing future generations of any hope of prosperity.
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All articles posted on this blog give the views of the author(s). They do not represent the position of LSE Inequalities, nor of the London School of Economics and Political Science.
Image credits: Clare Louise Jackson via Shutterstock.
