Rent Controls: what will ‘Red Ed’ conjure up next – how about compulsory purchase of privately owned property?

Yes, we have all heard it now, ‘Red Ed’ is going to impose rent controls on private rented property if he and his ‘merry men’ gain power on the May 7th.

I don’t disagree with the suggestion that Tenancy Agreements should be up to three years long and not, as is more usual, one year.  In any event most Tenancy Agreements prescribe for an RPI increase (and no more) so what is all the concern about?

Do we need any more evidence of the Trotskyite origins of today’s Labour Party?

They must be rummaging through Michael Foot’s and Denis Healey’s ‘bucket list’ as to the most audacious left wing policies that they didn’t have the courage to propagate in the 70s for fear of annihilation of the Electorate.

Is this not a further example of the shadow government’s insatiable appetite for government interference in markets?  Have we not learnt enough from their folly-de-grandeur of their last administration i.e. home packs etc?

Clearly they are exhibiting a patent lack of visceral understanding of the dynamics of the rental sector by this suggestion.

Rent controls so skewered the market in the 70s that the rental sector (under a certain rateable value at the time) dried up such that there were very few properties on the market to rent that would fall under the Landlord and Tenant Act at the time and this disadvantaged any aspiring young family who could not get on to the property ladder and were obliged to rent as an alternative.

Thanks to our esteemed former Chancellor and subsequent comedic Prime Minister such damage was done to private pensions by way of grabbing the tax credits from pension companies that, to secure peoples future, they turned to Buy-to-Lets in-order to provide a nest egg for their retirement (and rightly so).

The market needs a good supply of private landlords to soak up the capacity of tenant demand without which more families will be homeless and dependent on local councils for affordable housing.

Clearly ‘Red Ed’ has learnt nothing from the feeble attempts of other government leaders such as Chavez and the Argentinean President, Christina Fernandez de Kirchner, in their feckless attempts to get their governments to interfere in markets.

This policy could dump an unprecedented amount of properties on the market at one time exacerbated by the Mansion Tax (another one of ‘Red Ed’s’ follies) and before you know it we could have a full blown property recession, an illiquid market and a ‘truck load’ of negative equity.

What else is this lunatic going to dig up from the dusty trunks in the attic of the left wing policy house; maybe a re-purchase of former State owned industries, a compulsory purchase of private property (for public consumption with Stalinesque overtures) even more regulation (as if we haven’t enough with data protection/health and safety and financial services).

They say we can trust the great British Electorate to be moderate in their voting intentions but it would be a disaster if these measures came to pass by means of a re-elected Labour government.

It is not more regulation that you need its more private and affordable property, particularly in London, and government can help by unblocking the funding and the planning procedures for residential development to get more homes built.  If this came to pass the increase in supply would help to reduce price growth (both for sale and to rent) that would help both the first time buyer and potential tenants alike.

Even the Soviet Union and the Chinese have woken up and ‘smelt the coffee’ by realising that the ‘dead hand’ of government should never interfere in markets but Mr Miliband has clearly missed this chapter of modern history and we could all pay a hefty price for his ignorance.

Voters, beware!

Written by Trevor Abrahmsohn.
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