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Message to Labour conference: ‘Rent controls do not work’

Labour’s plan to introduce a rent cap has been slammed by ARLA Propertymark. 

Labour has proposed capping rents and with Labour’s conference well under way, shadow chancellor John McDonnell has vowed that is what the opposition party will do if it wins a majority at the next general election. 

The party is developing rent control proposals as part of its election bid in the hope that it will gain public support to give Jeremy Corbyn and McDonnell the power to combat increasing rents across the UK. 

McDonnell said: “We’ll cap rents and build a million new genuinely affordable homes, so young people in particular, aren’t pouring away thousands of pounds from their wages to rip-off landlords.”

But in response to McDonnell’s speech on his intention to introduce rent caps at the Labour Party Conference 2019, David Cox, chief executive, ARLA Propertymark, was not impressed.

Cox said: “Rent controls do not work; it hits hardest those it’s designed to help the most. The last time rent controls existed in this country, the private rented sector [PRS] shrunk to the lowest levels ever recorded. 

“At a time of demand for PRS homes massively outstripping supply, rent controls will cause the sector to shrink. In turn, this means professional landlords will only take the very best tenants, and the vulnerable and low-income people that rent controls are designed to help, will be forced into the hands of rogue and criminal operators, who may exploit them.” 

Poll: Do you agree that rent controls do not work and that they hit hardest those it’s designed to help the most?

PLACE YOUR VOTE BELOW

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    I shudder to think if this absolute idiot gets into power selling some now just in case

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    Watch the capital flight from the UK and people and business....they'll be nothing left to tax.
    The UK will rail spin into debt and greater poverty.

    Paul Barrett

    McDonnell has already stated that if Labour attain power Capital controls would be imposed that very day.
    Any capital needs to moved away from Labour clutches well before they possibly assume power.
    That might mean taking capital losses due to needing to liquidate quickly.
    That is probably a price worth paying to remove the principal capital away from Labour clutches.
    Investing in gold coins which aren't subject to being reported to HMRC might be an option.
    I'm not sure but I believe coins AREN'T subject to VAT whereas bullion is.

     
  • Paul Barrett

    What we have here is the effective return of Regulated Tenancies.
    With S21 abolished and a tenant continuing to pay a controlled rent level with an Assured Tenancy a LL would be hard pushed to use a revised S8 process to remove a tenant.

    There would be little rent defaulting with controlled rents.
    Perhaps LL will have to persuade family members to move into rental properties though that would be a breach of most mortgage conditions unless the LL converted to a regulated mortgage product of which there are few providers.
    Whichever way you look at it selling up is a very sensible solution to these issues.
    LL are effectively in a corner escapable only by selling properties.
    No LL would be stupid enough to buy rental property if Labour look like attaining power.
    I doubt that many lenders would bother even offering mortgages if there is the possibility that the loan might be forced to be paid off early by a Tenant RTB demand.
    Even if Labour don't attain power this time there is always the next GE possibility.
    It is impossible to be in the PRS when your business model could be destroyed every 5 years with a bonkers Labour Govt.
    So even with Labour NOT in power the mere threat of them makes the PRS unviable.
    This refers to the AST PRS.
    There are of course many other ways of attaining rental income other than via an AST or AT.
    It would seem that the single household tenancy is now a defunct business model.
    Great as long as Labour doesn't attain power.
    Most LL take a long term view of their business to the tune of 30 years and more.
    How many LL would be prepared to gamble that for the next 30 years there would be no bonkers Labour Govt!!??

    Just the mere threat of a Labour Govt is enough to cause the terminal decline of the PRS.
    Those LL who stay in the market will be made of very strong stuff.
    That stuff I do NOT have!!
    Selling up remains the only viable business strategy for me.
    Accidental LL would do well to sell up now any properties they have previously lived in to avoid the additional CGT due after April 2020 plus they get rid of a property with no risk of RTB or rent controls.
    By all accounts that amounts to about 300000 properties which currently house about 1.5 million tenants.
    Where are they all going to live when all these properties are sold off!?

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