Tories on the attack.
Responding to Labour’s announcement on rent controls, Minister for Housing and Planning Brandon Lewis MP said:
‘First their energy price freeze collapsed when it was shown it would lead to higher prices and now their flagship policy to help tenants would actually lead to higher rents. Labour are in chaos.
‘Rent controls never work – they destroy investment in housing leading to fewer homes to rent and poorer quality accommodation.
‘The only way to have affordable rents is to build more homes which the Conservatives are doing – with housebuilding now at its highest level since 2007 thanks to our long-term economic plan’.
ENDS
Notes to editors
Labour’s ban on letting agent fees would just mean that tenants would pay higher rents.
· According to the Association of Residential Letting Agents ‘pledging to transfer [letting agents] fees to landlords or calling for outright bans will increase rents’ (
BBC News Online, 8 May 2014,
link).
Average rents increased by 69 per cent under Labour.
· Mean rents for all types of private sector tenancies in 1996/97 stood at £331 per month. By 2007/08 this had increased to £558 per month, an increase of 69 per cent in 10 years. These figures exclude any payments for water charges (
Hansard, 12 October 2009, Col 351W,
link; DCLG,
Table 731 – Rents, lettings and tenancies: private tenancies and rents by type of tenancy,
link).
Since 2010 average rents in England have fallen in real terms.
· According to the latest ONS figures, in the period May 2010 to December 2014 average rents in England fell by 1.3 per cent in real terms (ONS, I
ndex of Private Housing Rental Prices, October to December 2014, 30 January 2015).
Labour’s own Shadow Housing Minister doesn’t think rent controls work.
· Interviewed on Channel Four News Emma Reynolds said, ‘I think the crisis is so severe that the government cannot say we are going to sit back and let the market recover.
I do not think it will work in practice but what we have got to do is tackle the acute shortage of supply. We need to double house-building. We are not building half the number of homes that we need. If current trends continue, by 2020 will have 2 million fewer homes than we need’ (
Channel 4 News, 7 January 2014).
Experts says Labour’s rent controls policy will lead to higher rents…
·
The Institute of Economic Affairs has said Labour’s policy will lead to higher rents. ‘Since rents can alter between tenancies, tenancy rent controls cannot improve affordability for any group other than in the very short term. It is most likely to simply change the timing of rent costs over a tenancy by raising initial rents.
Indeed the existence of these [rent] controls may even increase market rents overall’ (Institute for Economic Affairs,
The Flaws in Rent Ceilings, September 2014,
link).
…And fewer homes to rent.
·
The OECD say that rent controls push down housing supply. ‘The OECD have made clear that rent controls reduce the supply of rented housing, saying that “easing the relatively strict rent controls and tenant-landlord regulations that are found in some Nordic and continental European countries could significantly increase residential mobility by improving the supply of rental housing and preventing the locking-in of tenants”’ (OECD,
Housing and the Economy: Policies for Renovation, 2011,
link).
Rent controls failed when used in the UK before…
·
Rent controls in the UK reduced private rented housing stock. ‘Rent controls resulted in the size of the private rented sector shrinking from 55 per cent of households in 1939 to just 8 per cent in the late 1980s. Rent controls also meant that many landlords could not afford to improve or maintain their homes’ (
Hansard, 27 October 2011, Col. 302W,
link).
…And continue to fail abroad.
·
In Sweden rent control policies have led to housing shortages. In Sweden rents are not set by negotiation between tenants and landlord but rather between landlord and the Swedish Union of Tenants and controls ensure that similar flats in different areas are charged the same levels of rents. But according to Sweden’s National Housing Board this has led to market failure, with developers being discouraged from building new properties and housing being poorly allocated, with people who can afford to move or buy a home being encouraged to continuing renting, reducing the number of properties for younger people looking to rent. Overall there is a shortage of 40,000 rental flats in Sweden, with the problem most acute in Stockholm (
The Local newspaper, 13 November 2013,
link;
The Local newspaper, 19 November 2013,
link).
·
France has passed a new law to cap rents which has caused construction output to slump. France has introduced a new law capping rents in expensive areas to make housing more affordable. In addition, home buyers must now fills out many more forms in order to give them greater protection. But this resulted in a 19 per cent fall in housing starts in the second quarter of 2014 compared to the same period in 2013 and a 13 per cent fall over the same period in housing permits (future construction estimates) (
Bloomberg website, 29 July 2014,
link).
·
New York’s rent control policies reduced the city’s housing supply and increased rents. Rent controlled properties, which account for nearly 50 per cent of New York’s housing stock, can be passed on generation to generation regardless of whether people can afford full market rents. These rules severely limit the number of properties available to rent in New York, resulting in an average monthly rent for a non-rent controlled property of $3000, three times the national average and the highest for any city in the United States (
New York Post, 18 March 2012,
link;
Reuters, 8 July 2013,
link).
. But they use it for actual policy making which is different to us saying kill the rich, toff bastards etc.
