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Sunday, October 30, 2016

Rent control through the back door

I have written before about my out and out opposition to any form of rent control. 

Why am I so vehement about rent control? 

It's not just because it will hit my pocket. 

No my main reason is that it simply doesn't work in the long term. 

Rent control fails to deliver lower rents for tenants. All that happens is that we end up with a diminished Private Rental Sector, meaning less choice for tenants and ultimately an unbalanced private rental market.

Labour Party rent control policy

Labour politicians have frequently muted the prospect of rent controls with the like of Ken Livingstone talking about rent controls in London, whilst Dianne Abbott also called for controls on London rents during her Mayoral election campaign. 

Despite promises at a national level, the Labour Party have been unable to bring rent controls in and make the policy stick.  However, the new London Mayor, Sadiq Khan is proposing just that, but this is rent control through the back door.

Khan back door rent control plan

Under Khan's proposals, he would force developers to offer rental property at a discount to market rents at80% of current market rents.  In some cases the discount on market rents would be much more. 

Property Week reports that in the London Borough of Newham rents could be as low as 55% of market levels.  All the checks, controls and restrictions will end up making what is an incredibly complex development procedure totally unworkable for many developers, resulting in them exiting the process, or putting their development plans on hold, hoping for an eventual reversal of the policy. 

Khan's policy is rent control through the back door. It will have no impact on the general level of rents in the capital or the rest of the country. It is simply tokenistic political meddling. 

What is needed in both the capital and the rest of the UK is more supply.

A system that ensures that there is healthy competition between landlords for tenants will do more to keep rents affordable than all the cock and bull tinkering dreamt up by vote grabbing politicians.

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