Rents in the private sector have been falling in real terms – and private landlords are fiercely opposed to any firm of rent controls, according to a new study.
The Cambridge research found that between 2006 and 2013 private sector rents increased by less than inflation and average wage rises both in London and in England as a whole.
Drawing on a survey of landlords in London, the report also found that 45% said they would sell all of their housing stock and leave the market altogether if they were legally required to cut rents.
The research was commissioned by the Greater London Assembly’s Housing Committee and carried out by the Cambridge Centre for Housing and Planning Research.
David Smith, policy director for the Residential Landlords Association, said: “The report bursts the myth, peddled by some, that rents are spiralling out of control.
“Whilst the RLA accepts that there are some areas, especially in London, where rents are high, this is quite simply as a result of a lack of supply.
“This report reminds us of the dangers of rent controls which would in fact reduce supply, thereby increasing rents. Rent controls would also severely reduce standards in rented housing as investment dries up.
“It would take us back to the bad old days of Rachman landlords.”
But Jonathan Monjack, CEO of landlords’ collective The Happy Tenant Company, said landlords might have to accept some form of rent controls.
He said: “While it’s understandable they do not want to see their income reduced, it doesn’t necessarily mean they will lose money should rent caps or rent controls come into force.
“The market needs to be overhauled when it comes to letting agent fees, hidden commissions and contractor costs which continue to mount up.
“Landlords could bring an equilibrium by reducing or capping rents while maintaining income by controlling the fees and costs they fork out for property management.”
The situation will get worse as the population increases. Rent control in any form WILL NOT resolve the problems. ONLY BUILDING MORE HOMES WILL. Shouting about rent control to be popular is just that shouting without taking any action to sort the problem.
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The Happy Tenant Company – what a great idea cap rents and cut agents fees. How about let a free market decide the rent and agents compete with each other over fees Comrade?
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We live in a democracy, a free market or do we? it seems that some believe it only applies to some and not others. While some may think rents are high, they can never get out of control as a whole, if the tenant can’t pay.
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Will is right. Building more house is the solution.
Drive past any new estate today outside the M25. Few or no flats, just 3, 4 and 5 bedroom houses.
Builders build for profit, not need. They can sell everything that they produce, why take a risk?
Only 140,000 new homes built in 2014, net inward migration to the UK, 298,000.
(Source: ONS statistics).
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There’s another thing to consider: 140,000 home built in 2014 – but how many were knocked down to build them? The only way to find out by manually going through each councils’ planning database, but the NET figure is way lower than 140,000.
An appreciable (fancy way of saying I can’t be bothered to check) percentage of houses are built by smaller builders who knock down one bungalow and build a terrace of 3 houses. Net increase of 2 not 3.
If we carry that maths through then we end up at a shade over 93,000 houses built which is less than half of that actually required.
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I do love a good statistic, you can make them seem what you like.
Obviously we do have a shortage of properties in England, but most developers would prefer to actually build flats (you can go up and add more units) but planning forbids it.
You have mentioned inward migration but what about outward and also deaths.
The government actually need to sanction a new city to be built, Extreme but would help the economy and housing crisis.
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