Wednesday, November 25, 2020

Majority Of Voters Support Rent Controls, Poll Shows

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The majority of British voters support the idea of introducing rent controls, a poll by YouGov suggests.

Ed Miliband recently said that Labour would place a cap on private sector rent rises, and introduce three-year tenancies, if the party won a majority in the 2015 general election. However, he stopped short of saying Labour would apply an overall cap on rent costs.

Critics argue that introducing rent controls would reduce supply and lead to poorer quality housing. Speaking to the Telegraph last month (April 2014), Simon Walker, Director General of the Institute of Directors, said:

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“Basic economics tells us that if you artificially hold down the price of something, you get less of it in the market. This is as true for housing as it is for anything else. At a time when we appreciate there is a housing shortage, this policy is particularly short-sighted.”

Labour leader Ed Miliband defended his party’s proposals:

“This is Labour’s fair deal for rented housing in Britain – long-term tenancies and stable rents so that people can settle down, know where the kids will go to school, know their home will still be there for them tomorrow.”

According to the poll by YouGov, 56% of voters support of idea of rent controls, while 33% disagreed. Asked whether intervening in the housing market to control rental costs was a move in the ‘right direction’, 56% agreed while only 29% disagreed.

Labour voters were more likely to support the idea of rent controls (76%-16%). However, the majority of Liberal Democrat voters also supported the move (53%), as did UKIP supporters (52%). Only Conservative voters opposed the introduction of rent controls – 35% in favour compared to 57% against.

Rising rents have been blamed for the spiralling Housing Benefit bill, which now stands at a shocking £25 billion. Almost 40% of this goes to private landlords as rising living costs and house prices prevent working families from buying their first home.

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The number of working people claiming Housing Benefit has increased by 104% since 2009 and a further 310 are applying for the benefit every day.

David Orr, chief executive of the National Housing Federation, said in December 2013:

“We hear a lot about ‘making work pay’, but a decent job won’t even cover the cost of a home in England.

“Billions of pounds of taxpayers’ money is wasted, lining the pockets of private landlords, when it could be better spent building more homes people can afford.

“Relying on the private rented sector so heavily is a costly sticking plaster rather than a solution.

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“In towns and cities pulling away from the recession the dysfunctional housing market is burning the fingers of many people.

“Hard-working families are spending more and more of their income on a home and many could be forced to move – away from jobs, schools and relatives.

“We need to address the problems of the housing market now, before another generation is left locked out and reliant on taxpayers to keep the roof over their head’.

An analysis suggests that 37% of Labour target seats in the 2015 General Election have a large numbers of private sector renters, which would possibly suggest that Ed Miliband’s pledge to cap rent rises could be a shrewd political move.

Some may argue that Labour should have gone further and pledged to cap overall private rents.

Such a move would give much-needed relief to a growing number of private sector renters, who are increasingly forced to claim Housing Benefit in order to keep a roof over their heads, due a shortage of social housing – mainly caused by rent-to-buy and councils selling off stock in the wake of budget cuts.

Those same people also argue that building more social homes – where rents tend to lower than in the private housing sector – would help alleviate some of the financial pressures experienced by so many people, and would likely bring down the Housing Benefit bill at the same time.

Increasing the number of social homes available to renters may also lead to lower house prices for the thousands of people who are finding it difficult to take that first step onto the housing ladder – supply and demand.

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