Rent controls are not the answer to the cost of living crisis
Reaction to GDP figures
The IEA's reacts to the announcement that Barclays are to cut 19,000 jobs over the next 3 years
Rent controls in the private rented sector will not solve high housing costs
“Rent controls are the wrong solution to rising housing costs in the UK. Labour have identified the problem of spiralling living costs, but this solution defies economic logic. Historically, such policies have been disastrous for tenants.
“Allowing rents to increase each year by only a benchmark of average market rents will prevent the efficient allocation of housing, creating dangerous distortions the higher the level at which the averages are calculated.
“Removing rent from market rates will create perverse incentives for landlords in areas where market rents rise quickly. Aside from creating unnecessary layers of bureaucracy, this policy may lead to landlords being uncooperative in the hope that tenants leave early. The consequences will be at the disadvantage of exactly the people the policy is intended to help.
“The key factor behind high cost renting is the lack of supply of homes where people want to live. Labour’s proposals to hold down rent increases will do nothing to alleviate this. To deal with high housing costs politicians must urgently liberalise the UK’s draconian planning laws.”
Notes to Editors:
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