Ed’s latest idea as to how to help the rental market ……….Oh dear wait for it !

 

Ed’s latest idea as to how to help the rental market ……….Oh dear wait for it !

As if the Labour Party is not sufficiently wedded to interfering in markets wait till you hear Ed’s new mantra on control of the rental markets. It would be laughable if he were not so serious about it

The latest epistle from those geniuses from Labour Party high command about control of the rental sector is the greatest bit of mis-guided interfering ‘hogwash’ I have heard in a long time. It is now self evident (as if we need any more reminding) that these judicious, infantile sound bites are completely meaningless at best and mischievous at worst.  When Gordon Brown was in the ascendancy he presided over thoroughly de-regulated markets that subsequently went berserk with all the money he was borrowing sloshing around the system.  Then, in tired old  ‘close the barn door when the horse has bolted’ fashion, tried to stick red tape everywhere afterwards to the extent that the wheels of commerce grind much more slowly now as a result.

When the dead hand of governments interfere with the smooth running of markets then havoc is only around the corner. Have you tried to open a bank account recently?  You need to be young enough so you are still alive when it is finally granted.  Health and safety, money laundering, data protection have all gone mad and invariably the cure is more lethal than the disease.

In order to plug the gap in the rental sector Ed and his ‘merry men’ are suggesting that rental values are capped, agents should not charge fees and tenants should have a greater notice to quit whilst the landlords have to suffer the consequences.

Its difficult to take this seriously when really it is a hollow sound bite aimed solely at buttressing the fast disappearing Labour vote in the forthcoming elections.  It does demonstrate, conspicuously, the visceral lack of understanding they have in the dynamics of the markets and what makes them tick.

Market forces decide the rental levels not legislation or government and rents do go up and down in accordance with demand and supply (as they should do). Invariably rents of existing AST tenancies only usually rise by the cost of living so that the landlord investment income does not go backward. Agents charge the landlords the fee not the tenant and then only agreement costs in some cases.

Lest we forget, the rental sector was a fraction of the size of what it is today from 1945 to 1992 whilst the arthritic ‘landlord and tenant act’, so one sided, protected the tenants rights (and their subsequent descendants) so that the rent paid was a fraction of market value and the tenure indefinite.

If you want to control rent levels (and their growth) then you have to use government money to buy or build Government housing stock and rent them out at subsidised rent levels that will cost a fortune and hey ho we are back to council houses that become neglected since there is no sense of ownership.

Limit the growth of rental values and landlords will not rent their properties and the ones that do will charge a fortune for the privilege. So Ed, you are advocating a smaller supply with greater prices that is bad for landlords and tenants alike …get a grip son!

Estate agents usually charge 10% of the first year’s rental and I can tell you from being in the business for 40 years there is very little profit in this.   Curtail the fees and agents will simply not bother to rent properties and then it will be a free for all amongst ‘cowboys’.

The only solution is to get more funding for residential development in order to build up the new housing sector that in turn will provide more affordable homes.  Break the political deadlock in the planning processes of the local councils which will allow much more residential development to go ahead

Ed, if you want to be taken seriously as a contender for number 10 think before you put your mouth into gear!