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Monday, April 27, 2015

Labour promise rent controls

Labour will slap a cap on rents according to latest report in the Sunday Times.

These rent controls will prevent landlords increasing rents above the rise in consumer prices.

Put your X in the wrong box on polling day and landlords and tenants may end up with the X shown above...not necessarily what they were expecting with cheaper rents but a shortage of quality rental accommodation.

Rent control may be a great vote winner with 'generation rent' but how would it work in practice?

My Current Rental Scenario
For instance, in my current scenario where I am currently undercharging my tenant by 20% because he is a good long-term tenant.  So, if I can't increase the rent to a market rent accepted by him.  Then my options are to serve notice for possession and kick him out of his home and get somebody else in.  Something that neither of us want.  Labour of course will have to employ an army of bureaucrats to police this or put the cases through an already overstretched legal system.  SENSIBLE POLICY? Only if you are desperate to appeal to the rather misinformed 11 million private renters.

What we should all really be asking for is for the politicians to deliver more houses and housing.  This needs LESS not more control but this might be a little too complicated and long-term for the politicians to deliver and for us the electorate to stomach hence the apparent appeal of Labour's 'quick fix'.

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Ian T Price said...

If Labour get in there will be a rush to hike rents well above CPI before the legislation is introduced.

Rents will then stagnate but at the overly inflated levels.

Tenets will pay much more but Labour will be able to claim that their policy is works because rents haven't risen.

We all get shafted and the politicians claim that as a success.

Such is the distorted world we live in.

Anonymous said...

If you want to increase your tenants rent to a level accepted by him, rent controls won't stop you. Nobody will be proactively policing rents, someone will have to make a complaint for any action to be taken. If the rent is acceptable to him, he won't complain.