Rent controls? A daft idea looking for a Labour Party to implement it...

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A committee chaired by a Labour MP is proposing to look at whether rent controls are a good idea:

MPs will examine the possibility of introducing rent controls as part of a new probe into the private rented sector.

The Communities and Local Government select committee launched a new inquiry today into the quality and regulation of private rented accommodation.

Issues that are likely to be examined include the option of introducing rent controls, the interaction between housing benefit and rents, and the regulation of landlords and lettings agents .

Rent controls are a pretty daft idea - they lead to things like this:

The major effects have been to reduce rents on pre-1976 units but to increase rents on newly constructed post-1975 units, to reduce new construction, to accelerate deterioration and conversion of the existing rental stock, to generate a severe rental housing shortage, to create an environment for key money, to inefficiently and inequitably redistribute income, and to significantly exacerbate government budgetary deficits by reducing tax revenues and inducing increased government housing expenditures.

And we also get folk like Peter Rachman who look to arbitrage the gap between regulated and unregulated rents (although one hopes without the colour bar this time).

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