A prominent Conservative has branded the rush towards rent controls by some politicians as “heavy-handed and economically illiterate”.
Janet Finch Saunders, an elected member of the Welsh Parliament, says in a piece for The National news website that rent controls “have been proven time and time again to not only be ineffective at combatting the issue of affordability, but have actually been detrimental to the housing market.”
She says that in Wales specifically, rent increases in recent years have been no more than 1.7 per cent annually – so introducing a cap on rent rises, which would probably be greater than that, could unwittingly produce higher rents rather than lower ones as landlords increased up to the cap level.
In addition, international experience – the politician cites Berlin and San Francisco – suggests that caps lead to surges in rent over time, and produce an exodus from the sector meaning less choice for tenants and reduced investment by landlords.
The longer term solution to high rents, she suggests, is more housing – and she is sharply critical of Labour’s record on house building in Wales, and its support for rent controls now having failed to mention them in manifestos before recent elections.
Finch Saunders continues: “To put it simply, Wales needs more houses. This task is looking to be an ever increasingly difficult one as the pandemic has affected supply chains across a range of industries affecting the housing sector.
“A potential combination of a reduced supply of housing due to landlords withdrawing out of the private rented sector and a further slowdown in house building due to the pandemic on top of Labour mismanagement, has the potential to create the perfect storm to further drive up rent and house prices.”
You can read the full piece here.
