In her blog, Merryn Somerset-Webb makes the case against rent controls.
Anyone who can remember the rented sector under the Rent Act can see that she's right about this. However, she muddles high rents with the nonsense that is housing benefit:
On the surface, it might look as though there is a case for this. Ten years ago, a mere 10% of Britons lived in privately rented accommodation. Today, 18% do. The prices they pay take up, on average, some 40% of their incomes.
That not only inhibits their consumption and their ability to save, but it also means a whopping housing benefit bill for the taxpayer. In 2003-04, 722,000 households in the private sector claimed housing benefit. Now some 1.7 million do (that’s 6.5% of all UK households) and the total bill is around £9.5bn.
Housing benefit is what causes high rents at the bottom end of the rented sector, it is not something that can be made worse by high rents elsewhere. The place for a cap is housing benefit, not rents, a point she fails to make.
That said, it is clear that the UK does have something of a problem in the form of rising demand for rental properties.
If this is what is causing rents to rise, then why are rents falling outside London and the south-east of England? Anyway, she goes on to contradict herself by saying that the high house prices are caused by all the new housing being snapped up by buy-to-let landlords. She then goes on to suggest a raft of Killer Policies for Reducing House Prices, Not, while avoiding mention of two things that would work, LVT and raising interest rates. As the icing on the cake, she finishes with the old chestnut that council housing is subsidised by the taxpayer.
3/10 Ms Webb, could do better.