An economist who previously suggested tenants should live rent-free for three months during the Coronavirus crisis has revised his thinking - and now he wants tenants to pay no rent at all until at least 2021.
The call has come from Richard Murphy, a chartered accountant and political economist who works as Professor of Practice in International Political Economy at the University of London. He has also founded a range of networks campaigning for tax and economic reforms.
Murphy contributes think pieces for the website of Tax Research UK, which undertakes work on taxation policy for aid agencies, unions, NGOs and others in the UK and abroad.
In his blog on its website he says there must now be “statutory rent holidays” for at least the rest of 2020.
“Thereafter rents should be reduced, drastically, and by law, and right across the board. Eighty per cent cuts may be appropriate. It may be more. Whatever is necessary to ensure business can survive must be done” he claims.
As if that was not enough, later in his blog he goes on to say: “I should add that because such a programme of liability reduction would make no sense for landlords alone if not matched by a similar scheme for owner-occupiers, who I predict will see the value of their houses crash in the near future as it becomes apparent that there is no market for them at anything like recent prices then they too must have a statutory right to owe no more on a mortgage than can reasonably exceed the market worth of their property.”
Murphy additionally asks what will become of landlords?
He says: “For small ones, I have argued for state support, just as I have other unemployed people. I can see no special case that might be made for such landlords now, especially since what I suggest will preserve some of their asset value, and an income stream, albeit a much reduced one.
“For larger landlords, the suggested arrangement will massively reduce the balance sheet value of the enterprise . It is very likely that these landlords will survive, but with vastly smaller market worth, and with their focus in the future being upon service supply, rather than asset accumulation.”