While in the 1970s the disastrous impact of rent control was widely understood it has been necessary to make the argument again with the Labour Party once more adopting the policy.
Brandon Lewis, the Housing Minister, did so effectively in Parliament with this Written Answer. He said:
“The latest Office for National Statistics figures show that private sector rents have actually fallen in real terms across England since 2010 (rents up 10.6 per cent from May 2010 to December 2014, compared to CPI inflation of 12.1 per cent). Indeed, regulated social rents have risen faster in recent years; average weekly rents rose by 25.4 per cent from 2008-09 to 2012-13 in the social rented sector, compared to 6.5 per cent in the private rented sector.
The historical evidence is clear that rent controls resulted in the size of the private rented sector shrinking from 55 per cent of households in 1939 to just 8 per cent in the late 1980s. State-imposed price ceilings meant that many landlords could not afford to improve or maintain their homes, leading to worst conditions for tenants. Ultimately, the reduction in supply from such controls would push up rents and reduce choice for tenants.”
Then Mr Lewis pointed out that as recently as 2010 the Labour Government held a consultation on the private rented sector which stated:
“A key factor behind the decline in the private rented sector was the introduction of rent controls during the First World War, and these became more extensive over time. Artificially low rents reduced investment in the sector, contributing to a tenure shift to owner-occupation and lower maintenance standards in the stock that remained. A turning point was the 1988 Housing Act – which removed rent controls and introduced short hold tenancies.”
Mr Lewis added:
“I appreciate the HM Opposition have now swung to the left, and are calling for a form of state rent controls, as part of their business-bashing agenda. Yet rent controls would decimate the action that this Government is taking to increase private and institutional investment in new rented accommodation, as well as leading to worse property conditions for tenants by discouraging investment in existing accommodation.
“As Swedish economist, Professor Assar Lindbeck, famously remarked: “rent control appears to be the most efficient technique presently known to destroy a city – except for bombing” (Lindbeck, The Political Economy of the New Left, 1972).”
Rather worryingly the question was raised by the DUP MP Ian Paisley Jnr. That rather implied that Mr Paisley feels a return to rent controls would be welcome. Could this be the basis for a Miliband/Paisley coalition? Two parties coming together to drive out the private landlord.