It is hard to know exactly what Jeremy Corbyn means when he talks about “rent controls”.
Is it controls on rent increases during the term of a tenancy? Most decent landlords are not in the business of hiking rents sharply during the term of a tenancy or at renewal because they don’t want the costs and hassles that come with losing good tenants.
So we suggest such a move would not be a concern for most landlords. Or is it another form of rent control, where rents are pegged at some arbitrary level set by an ‘all-knowing’ state?
In Corbyn’s closing comments at the recent party conference in Brighton, he proposed that under Labour, councils could be given powers to control what he calls “skyrocketing rents”. He will be thinking especially of some form of rent control in London.
Following the steep increases to landlord taxes that former chancellor George Osborne introduced, it is predicted that the size of the private rented sector will shrink by about a tenth in the next 10 years, which would be likely to lead to an excess of demand over supply and hence higher rents.
The problem is that a “fuller form of rent control” where rents are set by the state or local authorities does not have a great record of success in any place in the world or at any time.
Corbyn does not even need to go back to research the old days of rent control - which spawned the careers of notorious criminals such as Peter Rachman in London. Nor need he look overseas for examples of what can go wrong.
He need only look at today’s experience where the withdrawal of private landlords from letting to tenants who are dependent on housing benefit in the capital points the way to what happens when controls of this type are brought in.
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