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Misleading Reporting of Rent Rises

May 1, 2015 | Landlord News  

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The argument for rent controls, promised to be introduced by a Labour government, received a bit of a boost in the last week following reports that rents in England and Wales had risen above inflation over the last five years. However, a breakdown of the data soon reveals the flaw in the rent control argument.

Findings by LSL Property Services’ Buy-to-Let Index showed that rents in England and Wales rose by 4.2% above the rate of inflation over the last five years. But dividing England and Wales into ten geographical areas yields very different results than when taken as a whole.

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The high rent rises were driven by three areas: London, the South East, and the East of England. In the other seven areas, rent rises were below the rate of inflation, meaning they actually fell in real terms. If rent controls had been in place over the last five years, tenants in London would have benefited, but tenants in Yorkshire, where rent rises were 3.3% below inflation, would be paying more.

The situation for tenants in London is difficult, with rents rising at 16.7% above inflation. But to look at it on its own and extrapolate it to the rest of England and Wales is a mistake. Policy-making can’t really get more London-centric than this.

If the aim is to secure a better deal for all tenants, why enforce a policy that ensures that most tenants outside of London will be worse off as a result?

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