Why “Rent Control” is bad for the UK?

Rent Control’s do not work they create shortages and decrease the quality of housing. The advocates know it but they think rent controls are “humanitarian” after-all the Government has to do something to stop greedy landlords from keep buying up all the houses and increasing rents.

In a free society the British Government must avoid Rent Control’s as it’s housing shortage becomes a housing deficiency. It should no more tell a landlord the price to charge for its services as much as it should tell a tenant how much he can spend. Both landlord and Tenant have the right to “just say no” to each other.

Rents are decided by Supply and Demand, if their is a large demand due to the UK Housing Shortage then rents gradually rise, on the other hand if theirs an influx of 1 bedroom flats expect landlords to start lowering their 1 Bedroom flat rents. No landlord wants an empty property if rents are too high and if rents are too low, funds go back into other investments. What does rent control do to supply and demand? .. It means their are less investors so supply decreases from new entrants and Landlords look to sell properties that are hit and not with little margins… Rent Control’s increase the Asking Price whilst forcing it by law to remain the same.

Rent Controls violate a Landlords rights – put a gun to their head that they either charge £X or the “new law” will fine or take away management of their property, nothing more than an immoral enslavement of the property owner for the need of another. The man who produces while others dispose of his product, is a slave.

Rent Control Advocates outline that it is morally justified in forcing Landlords to provide housing for the needy but its not Landlords that withhold supply of houses to those on low income. Landlords should be rewarded and not punished for supplying properties. Any housing shortage in the UK is due to Government inaction in the face of housing shortage on both sides of the benches. With little construction in the Private Sector and the Social Housing stock sitting idle whilst managers pocket big wages as glorified letting agents.

“Landlords are Selfish for charging the market rent higher than mortgage payments” is a justification for government to take action. If being Selfish is a result of landlords not sacrificing themselves for others that could be right. Landlords do not know when Interest Rates will rise, if theirs a void period, the roof collapses or if their own home mortgage will increase – they take a risk in investing money in property and need to hedge against that risk with a margin. Its right to argue that “Tenants are Selfish for wanting the best property for the lowest rent” with all the risks this type of investment may hold.

Landlords should not be apologetic for the services they provide and should stand up against socialist forces in the UK wanting to decide what landlords charge for their services. Such as the Hackney Renters who protest to “Impose rent controls and restrictions on private landlords, including minimum quality standards”.

If controls are introduced, it will mean less margin. Landlords either forced to make self sacrifices such as downsizing their own home or allow a decrease in quality of their house stock. It will mean less entrants into Buy to Let meaning a reduction in supply of housing at a time when theirs already a shortage.

Mayor of London Boris Johnson recently said “Better standards and boosting supply, is the key to taking the pressure off London’s rental market, not burdensome rent controls which deter investment and remove the incentive for good service.”

Will other government leaders take the same view as the Housing Shortage enters a Housing Deficiency in the UK without a credible plan to increase supply?

As seen on Property Tribes