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Tuesday, July 15, 2014

Landlords paid to cap rents

Camden Council are shelling out taxpayer pounds to try and come up with an answer to the issue of rising rents.  Christine Whitehead an academic from the LSE will no doubt be paid 'shed loads' to suggest ideas of how rents can be stopped from rising.

The nub of the problem
Firstly, isn't rising rents a symptom of spiralling London house prices.  If the cost of a productive asset increase 25% in a year, then it follows that the returns required from that asset will also need to rise by the equivalent amount or else the rental yield and  investment returns fall massively.  That level of rising house price also indicate to me that tenants want to live in the area.  Surely, a positive thing.

Half baked political sop
The Cllr cabinet member for housing Cllr Julian Fulbrook (and ex colleague of Christine Whitehead) is looking at offering loans to landlords for capital repairs in return for signing up for the councils rent stabilisation scheme.  Apparently, the big benefit for landlords would then be to have a kitemark saying Camden Council Approved.  Oh yipperdee do!

The real problem
The real problem is that not enough housing is being built in the area for people to rent or buy.  One resident of Camden a Mr Ed Milliband if he gets into power will make thinks a hell of a lot worse by instigating rent controls and mandatory 3 year tenancies.  Plans like this or even the threat of it will kill any build to rent development schemes dead in the water.  What we need in the capital is a long-term vision to build more housing.  But politicians don't like to do long-term and especially when a general election looms next year.

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