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Labour Insists on Damaging Rent Controls

April 27, 2015 | Landlord News  

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Landlords and housing experts have not reacted favourably to Ed Miliband revealing some details regarding the policies a Labour government would implement which affect the private rented sector. Even campaign group Generation Rent, which had been a strong supporter of their proposals, now fear that the plans are flawed and will worsen the lives of tenants.

Chancellor George Osborne, along with several other senior Tories, warn that rent controls tied to inflation will suppress house building and drive up rents. Osborne called Labour’s plan a “totally economically-illiterate statement that grabs headlines, but is dismissed by every expert who looks at it.”

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Organisations such as the RLA, the NLA, ARLA, and The Confederation of British Industry all agree that rent controls are a bad idea that will discourage investment, and that the solution to the housing shortage is, shockingly, to build more houses.

Even some in the Labour Party appear to be sceptical. Former minister Tessa Jowell warned last week of the “unintended consequences” rent controls might have, and shadow housing minister Emma Reynolds said in 2013 that: “I don’t think rent controls are going to work in practice.”

RLA Chairman Alan Ward said: “For some, it’s easier to achieve a cheap political point by calling for rent controls than provide a prescription for growth in the private rented sector. Ultimately, tenants would lose as they find themselves forced into slums rented by Rachman landlords operating outside the legal market.”

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