Rent controls - good or bad?

[loraward]

Come on...break the habit of a lifetime and answer a question...would you sell your house for 50% of it's market value? It's an easy "Yes" or "No"...

 

Yes if the house I wanted to buy was also 50% of it's market value, I think I have made that point very clear.

[Cyclone]

Yes if the house I wanted to buy was also 50% of it's market value, I think I have made that point very clear.

 

Assuming that you didn't have a mortgage locking you down and making moving impossible, AND that the sellers didn't have a mortgage and had found somewhere to move too.

 

Which is why volumes drop so significantly, because of the people who won't and the people who can't move, after which the people who will still move are so restricted that they can't find the house they want and can't complete a chain.

 

---------- Post added 30-04-2015 at 07:33 ----------

 

Clearly landlords are going to

charge as much as they can, which wouldnt be the market finding a level, it would be one group driving prices up.

 

That is the market finding a level, because tenants are free to shop around and landlords are in competition with each other.

 

---------- Post added 30-04-2015 at 07:35 ----------

 

Why shouldnt rent increases be linked to the inflation rate?

Why shouldn't the price of milk be linked to inflation?

Because we operate a free market.

Why is there govt interference with deposit subsidies?

Because some regulation is required, but IMO not including price regulation.

Its clearly not operating under free market principles you believe it is. And rightly so.

Yes it is.

There could be regulation of banks, better mortgagedeals, stopping estate agents chrging fees, construction subsidies. Lots will and can happen, but only with state help.

Hahaha, regulation of banks. As if they aren't regulated up to the eyeballs.

You're suggesting that the government try to force banks to offer cheaper mortgages for BTL, when cheap credit was the source of the financial crisis not long ago! Genius.

Put estate agents out of business, good plan.

Lots of this is possible yes, but it's pretty much all stupid.

[ubermaus]

Assuming that you didn't have a mortgage locking you down and making moving impossible, AND that the sellers didn't have a mortgage and had found somewhere to move too.

 

Which is why volumes drop so significantly, because of the people who won't and the people who can't move, after which the people who will still move are so restricted that they can't find the house they want and can't complete a chain.

 

---------- Post added 30-04-2015 at 07:33 ----------

 

 

That is the market finding a level, because tenants are free to shop around and landlords are in competition with each other.

 

---------- Post added 30-04-2015 at 07:35 ----------

 

Why shouldn't the price of milk be linked to inflation?

Because we operate a free market.

Because some regulation is required, but IMO not including price regulation.

Yes it is.

 

Hahaha, regulation of banks. As if they aren't regulated up to the eyeballs.

You're suggesting that the government try to force banks to offer cheaper mortgages for BTL, when cheap credit was the source of the financial crisis not long ago! Genius.

Put estate agents out of business, good plan.

Lots of this is possible yes, but it's pretty much all stupid.

 

Clearly its a market where the govt have substancial influence. Saying landlords should set there own prices is ridiculous and benefits nobody other than landlords in heavy demand areas .

 

---------- Post added 30-04-2015 at 09:53 ----------

 

Not sure what you mean by milk prices? The price of milk is linked to inflation. Landlords will have to offer price increases not above this over a longer term contract.

Edited April 30, 2015 by ubermaus

[loraward]

That is the market finding a level, because tenants are free to shop around and landlords are in competition with each other.

 

The level is set by affordability and affordability is skewed because government pays HB. Without HB most tenants couldn't afford the rent so rents would because landlords wouldn't want empty properties.

[Cyclone]

Clearly its a market where the govt have substancial influence. Saying landlords should set there own prices is ridiculous and benefits nobody other than landlords in heavy demand areas .

That's what happens in a free market. Demand increases the cost.

Not sure what you mean by milk prices? The price of milk is linked to inflation. Landlords will have to offer price increases not above this over a longer term contract.

 

You think that the price of milk is legally restricted to increases in line with inflation

[sgtkate]

The level is set by affordability and affordability is skewed because government pays HB. Without HB most tenants couldn't afford the rent so rents would because landlords wouldn't want empty properties.

 

Absolutely. I'm having a week of agreeing with people I normally argue with! So really we should build more social housing and massively remove the HB going to private landlords.

[Cyclone]

The level is set by affordability and affordability is skewed because government pays HB. Without HB most tenants couldn't afford the rent so rents would because landlords wouldn't want empty properties.

 

MOST tenants.

 

---------- Post added 30-04-2015 at 10:37 ----------

 

The affect of HB does not make this statement from ubermaus correct;

 

Clearly landlords are going to

charge as much as they can, which wouldnt be the market finding a level, it would be one group driving prices up.

 

This IS still the market finding a level, HB has an affect, nobody said otherwise, it's irrelevant to the fact that this is still the market finding a level. Landlords cannot charge an arbitrary amount, they are constrained by the market value of letting their property. Charge too much and it will stay empty.

[sgtkate]

MOST tenants.

 

---------- Post added 30-04-2015 at 10:37 ----------

 

The affect of HB does not make this statement from ubermaus correct;

 

 

 

This IS still the market finding a level, HB has an affect, nobody said otherwise, it's irrelevant to the fact that this is still the market finding a level. Landlords cannot charge an arbitrary amount, they are constrained by the market value of letting their property. Charge too much and it will stay empty.

 

The thing is that I believe secure housing is universal right. Due to a lack of social housing many of those people who would normally be a council tenant become private tenants in receipt of HB. This costs the council a considerable amount of money and does keep rents high due to demand. If we built more social houses, the number of tenants would drop as would demand bringing rents down.

 

Secondly, every house owned by a landlord (the one I own included here may I add) removes a potential home that could have been bought by someone as their only home. This increases demand on other available properties and the prices rise pushing even more people out of their price range and into rented properties, so demand grows for rental property, others see this a good way to make profit and the vicious circle continues.

 

Linking rent prices to inflation is one way to help this situation but really either completely limiting landlords profits, making buy to let mortgage illegal (neither of which is likely to happen even with a Labour government as many of them are still property developers!) or building a vast number of council properties then things will remain out of balance.

[ubermaus]

The issue with 'market finding a level' scenario is its creating an unsustainable housing bubble in places like London. Other places will follow suit.

 

---------- Post added 30-04-2015 at 10:48 ----------

 

if more houses are not built, estate agents are not regulated and all the other points I made earlier....i.e. govt intervention.

 

---------- Post added 30-04-2015 at 10:50 ----------

 

That's what happens in a free market. Demand increases the cost.

 

You think that the price of milk is legally restricted to increases in line with inflation

 

Yep, if you want a snapshot of inflation look at the prices of milk and bread.

[Cyclone]

The thing is that I believe secure housing is universal right. Due to a lack of social housing many of those people who would normally be a council tenant become private tenants in receipt of HB. This costs the council a considerable amount of money and does keep rents high due to demand. If we built more social houses, the number of tenants would drop as would demand bringing rents down.

I agree.

 

Secondly, every house owned by a landlord (the one I own included here may I add) removes a potential home that could have been bought by someone as their only home. This increases demand on other available properties and the prices rise pushing even more people out of their price range and into rented properties, so demand grows for rental property, others see this a good way to make profit and the vicious circle continues.

The overall supply of houses remains entirely the same, it just shifts the balance between rental/purchase. Demand stays the same, supply stays the same, overall.

 

The only solution is to build houses, which doesn't have to mean government building them. Changing planning law, taxing land banks, there are lots of other ways to increase house building.

 

---------- Post added 30-04-2015 at 10:52 ----------

 

Yep, if you want a snapshot of inflation look at the prices of milk and bread.

 

Sorry to break it to you, but milk is not legally linked to inflation. If there was a sudden shortage of milk, the price would go up quickly.