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Tuesday, June 23, 2015

LSE report on the impact of rent controls

A NLA commissioned report by the London School of Economics and Political Science (LSE) has concluded rent controls in the private rented sector would fail to improve the housing situation.

The LSE have published its interim report, in which it considered evidence from the UK, Germany, Ireland, San Francisco, New York and the Netherlands.

Carolyn Uphill, Chairman of the NLA, commented on the reports interim findings:

“The report is required reading for Labour leadership and London Mayor hopefuls, who seem to be ignoring both academic evidence and the overwhelming rejection of similar policies by the electorate last month.

“Private rented sectors in many countries, regulated or not, are facing major problems in high demand areas. Market fundamentals cannot just be regulated away”.

Kath Scanlon of LSE London commented:

“In light of the various proposals put forward before the General Election, we were asked to explore evidence from other countries about how rent controls and other regulatory policies affect the private rented sector.

“We found clear evidence that inflexible controls reduce supply, but the strongest message was that what may work in one country cannot simply be transferred to a different market and institutional environment”.

Mrs Uphill continued:

“The taxation of buy-to-let is a touchy subject for some, even though landlords in the UK receive no special treatment compared to other businesses.

“This report reinforces why successive governments have chosen to treat landlords as businesses. Doing so encourages best practice and, above all, helps to ease the housing crisis.”

The final report will be published later this year, after a more detailed investigation into London's private rental sector.

Download the LSE’s interim report on the effects of rent controls

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