The Government would be “incomprehensibly stupid” not to consider capping rents in the private sector.
The remark was made by a leading figure in the social housing sector, and immediately pounced upon by a private landlord organisation.
David Orr, chief executive of the National Housing Federation, trade body for social landlords, told his organisation’s annual conference that private rents are close to a record high, but the Government was too frightened even to start a conversation about introducing rent controls.
The Residential Landlords Association said it was “surprised” that Orr had “failed to recognise that landlords in the private rented sector in the year between May 2012 and May 2013 oversaw rent increases well below inflation at just 1.3% (just 0.8% when London is taken out of the figures)”.
Speaking ahead of the Labour party conference at which the issue of rent controls will be considered at a fringe event organised by the RLA, chairman Alan Ward commented: “I am disappointed by David Orr’s refusal to accept basic housing economics.
“His calls for rent controls are based largely on a select few areas of London boroughs that have seen rents rise as a result of an acute housing shortage across all tenures.
“Private sector landlords would no doubt be able to keep costs down if they too enjoyed the kind of public subsidies enjoyed by housing associations.
“Rent controls are the same as using a sticking plaster to treat the flu.
“The problem David Orr highlights is one of supply, which would be critically undermined by capping rents.”
Also in his speech, Orr called for the planning system to be given to officers and taken away from elected councillors who were often voted in on tiny minorities opposed to house building.
He said this brought them into a conflict between long-term planning goals and short-term politics.
He said planning should be visionary and that if officers became responsible for it, large-scale house building could get under way in many parts of the country.
Orr said such a move had a precedent: 30 years ago, council housing was allocated by councillors, a job now done by officers.
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Comments
I would imagine the cost of most things are"close to a record high" it's how inflation works.
Oor dear! What a brainless idiot. Nuff said.
"The underlying 'issue' is the crazy notion that an item is suddenly 'worth more' because there is a queue to obtain it."
Seriously? You do understand that what you just said is in direct conflict with the economic principles of the entire developed world?
SA Longden the laws of economics, particularly those of supply and demand, do dictate this. A shortage increase demand and thus prices, a surplus the opposite.
If rents are to be capped then there needs to be a floor made as well or else from a business perspective the is limited upside and bottomless downside.
Profits made one year are needed to offset losses another- hence the HMRC allowing for carried over loss to be offset.
Free market economy is what drives prices, people outbid due to short supply so they may as well blame the renters themselves if you follow this logic, as if no one paid then rents would have to come down.
Quite simply the only long term solution is for supply to increase by sucessive governments to embark on long term social housing, rather than them all talking and doing nothing, as well as agreeing that the stock will not be sold off, with increased supply allowing making rents more competative.
@ S A Longden
Were you at the front of the queue calling for higher rents when rents dropped through the floor a few years ago?
I thought not.
Excuse me, but the shortage of housing is not the issue at all. The underlying 'issue' is the crazy notion that an item (in this case a dwelling) is suddenly 'worth more' because there is a queue to obtain it. A product doesn't magically and retroactively cost more to produce or maintain due to more wanting to purchase/rent it.
Any comment upon the market where the person's title includes the word "Social" is nearly always leftist drivel with a poor understanding of the 'real' world in which the rest of us live.
No doubt he is at the Labour Party conference this week lobbying Red Ed to "do something".
I agree with the RLA. This idea is unbelievable.
I wonder what the economic consequences of capping specific areas of London would be. Capping doesn't increase stock, it just means landlords are more likely to dispose of their asset due to lack of return which reduces the number of rental properties available. Add in the 'licensing' and having an investment property looks very unattractive indeed.
The shortage of housing is the issue, not the free market. If the planning regulations were properly revised and the ridiculously onerous s106 requirements were made more reasonable more schemes would become viable.
20% social housing has an impact on the profitability of a potential scheme and as such reduces the chance of a developer obtaining funding. Better to have 10% of something than 20%+ of nothing.
Just look at the swathes of land standing empty in the Royal Docks.