Register now but come back in ten years’ time, agents tell tenants

Can you imagine someone walking into your agency to ask about rental properties – and you having to ask them to register their interest and come back in ten years’ time?

Or maybe 20?

Can you even begin to imagine a city where very few agents have any lettings properties available at all, and where most private rentals are handled through some kind of Boris department?

And where tenants barely ever move once they do, finally, get somewhere to live?

And what about a Britain where every year, ARLA sits down with Shelter to hammer out what rents should be for the next 12 months?

Unbelievable as it sounds, the precedents already exist – in Stockholm, the so-called world capital of rent controls.

How do we know?

Well, we get some interesting feedback to some of the stories on EYE, and none more so than to our story yesterday about Generation Rent receiving a fund so that it could fight for rent controls in London.

A reader kindly sent us a link to this and warned: “Perhaps this could be London in a few years?”

Apparently, in Stockholm waiting time for an inner city department is 10 to 20 years, and around 7-8 years in the suburbs.

The official housing queue, run by the city council, means that would-be tenants earn one point for every day they wait. To get an apartment, they need both maximum points and money for the rent.

When an apartment in inner Stockholm recently became available, 2,000 people applied for it. The person who got it had been waiting in the official housing queue since 1989.

The blog notes, “Rent control creates many more problems than it solves”.

Intrigued, EYE looked around for more information and found another blog, this time from an Australian who went to live and work in Sweden last year.

Dr Peter Vella reports that: “Sweden is well known for ABBA and IKEA, but it should be more widely known as the land of rent control.”

Each year, the Swedish Property Federation and Swedish Tenants Association sit down to decide rents. The artificially low prices stoke demand while weakening financial incentives for developers to build.

Rent controls make finding vacant properties harder, because people don’t want to leave their current property for fear of having to start queueing all over again.

“Walking around Stockholm, one notices the complete lack of real estate agencies advertising vacant rental housing.

“Where do Stockholmers go to rent apartments? The answer is Stockholm City Council’s housing service. Incredibly, 430,000+ people are registered as waiting.”

So, how on earth does Stockholm cope?

Well, to try and meet housing demand, it is legal for tenants to sub-let (which is just what George Osborne wants to introduce in the UK).

And there is a separate queue for insecure short-term lets.

The blog ends: “With rent controls, be careful what you wish for, you might just get it.”

The blog incidentally was written because Sydney, in Australia, is also considering rent controls.

As, of course, is London.

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4 Comments

  1. Peter Green

    The law of unintended consequences strikes again !

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  2. greg

    And Paris have just introduced rent controls. Socialist nonsense that never works.

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  3. Blockhead

    No mention of rent stabilisation in New York which has been running since the 40’s? Where there are restrictions on rent increases and changes to the length of tenancy. When this issue has been discussed recently – this has been the model that has been referenced rather than that given in the above article.

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  4. Anonymous Coward

    Hi PG. I love the law of unintended consequences – usually comes in to force when well meaning, good intentioned people interfere in a happy, cuddly way and screws up everything for everybody.

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