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Thursday, October 08, 2015

CCHPR report on London rent controls

According to a report by Cambridge Centre for Housing & Planning Research (CCHPR), 60% of London landlords would look to reduce the size of their portfolios if a rent freeze was implemented. 

The report commissioned by the London Assembly Housing Committee, spoke to 200 landlords.

The majority of landlords interviewed said the would 'continue as they are' if rents could only be increased in line with inflation, although 40% of participants stated that they would sell some or all of their properties if this measure was introduced.

 Tom Copley, chair of the London Assembly Housing Committee commented on the reports findings 

- "The choice is not simply between regulating rents and not regulating rents. There is no "one size fits all" system of rent control, with many cities around the world adopting different models. Each system has upsides and downsides. Our report seeks to find out what could work in London.”

“We need solutions that work for the millions of Londoners – especially families – in the rental sector. For families, the prospect of having to up sticks with very little notice often means disruption to many aspects of their lives, including schooling and employment,”


The report's findings are to be discussed.... 

2 comments:

murrayzz1 said...

60% of London landlords would look to reduce the size of their portfolios if a rent freeze was implemented? So what?

Who would buy these properties? Other BTL landlords with lower yield expectations, that's who. If 60% of landlords really did dump property at the same time, prices may drop, but there would be plenty of investors waiting in the wings to snap them up.

With yields in the city still reaching as high as 5%, a well-leveraged landlord with an 85% LTV mortgage can still make a fat 33% ROI per annum.

So these landlords will have no trouble finding a buyer, especially with all those pensioners lining up to swap their annuities for property.

Note that this survey only asked 200 landlords. This is quite a small sample, and it would be interesting to know whether it was representative of the landlord community as a whole.

So whilst this might be a good headline-grabbing statistic, it's not really a big story.

Unknown said...

While the statements by murrayzz1 may hold true in the short term, the sector will decline in the long term.

History shows that the laws and regulations brought in as a knee jerk reaction to the truly awful Rackman and his ilk killed the entire sector. It was only the changes by the Thatcher government, specifically the Housing Act 1988, that made the PRS viable once more.

The Thatcher government did not want to build more social housing and therefore successfully privatised the function of housing provision.

The current powers that be are also disinclined to build more housing but think it's an excellent idea to squeeze the PRS. This will only result in higher rents.

History may be bunkum, but as Einstein stated, Insanity is doing the same thing over and over again and expecting different results.

Let's learn from history this time around.