We’ve had some years now of direct action against landlords of residential properties. Limitations upon the deductibility of the costs of running such a business- the finance costs on a mortgage for example. The loading on of capital costs - at the same time as limiting the deductibility of finance costs - in the form of legally mandated energy efficiency standards. Mutterings about how people really shouldn’t be allowed to either market as they wish, nor change their minds about who they are renting to - there’s that considerable movement arguing that “no-fault” evictions should be banned.
All in all the costs of owning a property which is then rented out are rising. Therefore:
…adding that buy-to-let landlords face a severe financial squeeze over the next few years and many could sell up, further reducing supply.
Reduced supply and, as a result of other factors, increased demand (other factors including 500k net immigration, working from home leading to more space being desired for each resident, falling house prices making purchase seem unattractive and so on) then leads to:
London estate agent Foxtons has reported a 22% year-on-year surge in rents in the capital in the first nine months of 2022. The average rent hit a new high of £571 a week – about £100 higher than at the beginning of the year.
Record numbers of new renters registered in the third quarter: there were 30 for every property listed, which is around three times recent levels. At the same time, supply has dwindled: new instructions from London landlords have fallen by 18% in the first nine months compared with a year ago.
And of course everyone is complaining that the rent’s too damn high. That is, people are both cheering the restrictions upon supply and also complaining about the effect upon prices of that restriction of supply. Which does lead to a certain amusement at what people will complain about.
Perhaps, in order to clarify this for people we need to produce some sort of academic study here. Or even invent a whole new field where we can outline that interaction of supply, demand, pricing, of housing.
One minor problem would be what to call this new study. Inventing some -ology sounds a bit too Maureen Lipman really. Something Latinate would revolve around familiar procuratio and procuring has an unfortunate echo in English. Perhaps we should delve back into that Greek so beloved of the last PM but one (or however many it is by now) and modify ο'ικονομία in some manner.
The major problem would be that faced by any new such academic exercise. How many centuries would it take people to believe a word of this new science? Past experience suggests too many.