…quoting Swedish economist (and socialist) Assar Lindbeck, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”
It is said that cities like New York, clearly not destroyed by rent control but only due to the fact that condominiums and cooperative housing are two forms of housing ownership which grew exponentially as a way of getting around rent control.
Using the quote from economist Assar Lindbeck, Eric Pickles tweeted: “Rent control appears to be the most efficient technique presently known to destroy a city except for bombing.”
Surprisingly, left-wing campaigning group Generation Rent warns that rent controls could see families evicted and warns that Ed Miliband’s plans for rent controls are open to abuse by unscrupulous landlords.
Labour’s flagship pledge to bring back rent controls could make “very little difference” and contains “pretty scary” loopholes which could see vulnerable people evicted from their home… the plans would not stop landlords from hiking rents after the three year contract, the left-wing pressure group has warned.
They also criticised loopholes under which landlords will be able to evict tenants if they are selling their home or want to get it back for other reasons.
Alexander Hilton, director of Generation Rent, said: “These loopholes are pretty scary when you think they’re attached to a big financial incentive to use them – because that’s the only way they will be able to put the rent up in the first three years.
“A lot of landlords would continue being decent human beings so they and their tenants would be unaffected by these proposals. But vulnerable tenants whose landlords are exploiting them could find the Labour proposals make very little difference.”
All this is perhaps a reference to the pre-1970s rent control era in Britain which led to Notting Hill landlord Peter Rachman becoming notorious in the 1960s for the exploitation of his tenants. The word “Rachmanism” entered the Oxford English Dictionary as a synonym for the exploitation and intimidation of tenants.
Hilton added, but the proposal is a “long way from [the] wild west situation we have today” and offered tenants more security.
Ed Miliband has said that Britain is “almost unique” in having insecure one year tenancies: “We have families who don’t know from one day to the next whether they’re going to be kicked out of their home or rents will be jacked up.”
Chancellor, George Osborne told BBC Radio 4’s the World at One that Mr Miliband’s policy is “economically illiterate… I don’t know what’s more terrifying, whether he believes they are going to work or knows they are not going to work but says it anyway.”
The Residential Landlords Association has condemned the idea as a “1970s, left-wing policy” and warned it will hit people who have invested their life savings in buy-to-rent properties.
Alan Ward, the association’s chairman, told the Daily Telegraph:
“This is all attacking the private landlord. Private landlords will have their business threatened. A lot of landlords have bought properties as a long term investment and often as an alternative to a pension. It casts into doubt the long-term viability of the private rented sector as an alternative pension.”
Nick Clegg, the Liberal Democrat leader, has said:
“What the Labour Party has said might sound superficially attractive, but I think it will be much less attractive to tenants across the country when they realise that in practice it will mean huge hikes in their rent every three years and probably fewer properties available to rent in the first place because more and more landlords will simply quit altogether.”
— LandlordZONE (@LandlordZONE) April 27, 2015