pogo wrote:Of course there are things a government could do that would distort the market and likely remove properties from it. E.g.
Election 2015: Labour plan to stop 'massive' rent increases
Which is a ridiculous idea on all sorts of levels. First how do you know what is the right price level? There’s no reason for it to be “same as last year” or “same as last year plus inflation”. One year might not make much difference but over many years the price could diverge more and more from the market price. The upshot of that would be less supply, as more and more landlords were persuaded to do something else with their property or properties.
Again (sigh) the solution to too high prices is the same: improve supply. Hard in London where the main problem is, but if more properties are built outside but near London, reducing prices there and making commuting more affordable, then more can do that and not live in London itself.
Given a not inconsiderable amount of the rental market is funded through housing benefit then a rent freeze or restricted ( keeping this years affordability levels) increase would be a benefit to the state's coffers. It would also mean that as salaries increase there is a higher probability of people no longer qualifying for Housing Benefit as the rents become affordable.
There is a significant disconnect between the market and affordability consequently people are spending considerably more than 30% of the gross income on housing (rent, mortgage, insurance, etc.) which has knock on effects in terms of health (mainly stress related illnesses) which also impact on state expenditure (demand for NHS services)
As for the landlords some cash is better than none so the vast majority will continue to rent and those who no longer want to can sell their investments as residential property has limited uses outside of housing people.
As for the simple solution of build more, you seem to forget about infrastructure and amenities all of which are paid for by the state (developers contribute damn all to education, health, environment) through local authorities. Where's the money for that?
Coupled with that is the last government's plans to reduce hospital services in and around London (asset sales and redirecting to poor performing, CQC judged, hospital services) which are still ongoing.
Improving supply requires cash and flogging off 2 social assets in order to generate that cash, providing a generous discount/bribe to a small number of individuals, won't achieve that. Tory housing policy has reduced the returns the state used to make from social housing considerably and increased the reliance on housing benefit that previously did not exist, through older more cost effective funding models.
If you consider the PM and Chancellor as effectively the CEO and CFO of UK plc then both presided over cannibalising valuable assets for poor performing ones all in the name of dogma.
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