‘Allister Heath, writing in the Telegraph, says that the average rent in England and Wales is now 3.9% higher than it was this time last year yet the average wage in the private sector hasn’t gone up at all.
He points out that the squeeze is most acute in London where rents are 7.6% higher and the cost of renting is now over half the average wage in two-thirds of London boroughs.
But, Mr Heath says, rent controls, which are being called for, would be complete madness based on the fact that if prices are going up, that means that there is a scarcity of available homes to let.
The only way to tackle the issue is either to reduce demand or to increase supply. Rent controls would increase demand by keeping rents low, and reduce supply by making it less worthwhile for landlords to let out homes.
He concludes that the answer to the housing crisis can be found in the laws of supply and demand.’
Source: The Daily Telegraph