A former Tory minister has argued that landlords must be allowed to charge whatever rent the market will bear.
David Gauke (main image), the long-standing MP for South West Hertfordshire until 2019, tweeted: “Landlords should be allowed to rent out their properties at the market price” in response to the resignation of the minister for homelessness, Rushanara Ali, who put up the rent on her rental property within a few weeks of previous tenants moving out.
Writing in Conservative Home, Gauke explains that he appreciates private renters now spend a greater share of their income on housing than homeowners with mortgages (39% versus 20%) and a greater share than previous generations did. However, despite the Renters’ Rights Bill making it more difficult to increase rents, Labour – under pressure in inner city seats – could struggle to resist demands for a more interventionist approach.
"It is a policy that has been tried many times but invariably with adverse outcomes."
“The debate is likely to move quickly to the issue of rent controls,” he says. “It is a policy that has been tried many times but invariably with adverse outcomes. Landlords decide either to sell their properties or cease to invest in their upkeep. This means that those seeking tenancies lose out and, in the longer run, the quality of rental properties declines.”
Gauke believes market prices are very rarely, if ever, the cause of a problem but a symptom; the issue with high rental prices in London is that lots of people want to live there but there are not enough available rental properties.
Despite the market signals, supply isn’t being increased. “This is not, however, a market failure but a regulatory one,” he adds. “Government intervention has made it very hard to build houses. The consequence is that housing costs are high, resulting in yet more government intervention with which even its own ministers fail to comply.”
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