Lettings giant Belvoir is the latest organisation to express concern at the prospect of rent controls - a possible policy plank for some parties and pressure groups ahead of the forthcoming general election.
Unfortunately many of these organisations have little or no experience of the private rental sector and are using rental based statistics in the wrong way. This is a real concern, as there are many reasons why rent controls would be damaging and costly for tenants and landlords explains Dorian Gonsalves, commercial and franchising director.
Belvoir has 160 offices and analysis of its figures for the past seven years shows an average increase in rents of just four per cent across the entire period.
The current shortage of housing stock in the UK leaves the private rental sector unable to satisfy tenant demand and more specifically, demand for social housing. Is it really the responsibility of a private landlord who may be renting their house for various reasons, such as moving to find work in another part of the country, to be held to account and forced to provide lower cost housing for the social sector he asks.
He claims that if landlords feel they are unable to cover the costs of owning a rental property due to rental controls they are likely to dispose of their property or find another use for it, which will simply exacerbate the problem of reduced supply.
He particularly believes that Labour - the highest-profile advocate of rent caps - could learn lessons from Germany. That country implemented rent controls, but has a much more abundant supply of housing; Gonsalves says it is this supply, and not controls, which leads to reduced rents.
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Comments
I completely agree. In Croydon, the supply of rental properties is so low and demand so high we are getting tenant offering above asking price to obtain the property!!
The fact the LHA rates are around 50-100pcm less than market rents in the area mean there is very little social housing in the area.