Sturgeon’s rent controls will hurt Scots

It’s all getting a bit Latin American in Britain and not in a good way. Inflation is stuck stubbornly in the double digits, the current account deficit is at record levels, our new Prime Minister is preparing to spend the annual budget of the NHS on subsidising energy purchases, and regional separatists are tightening their grip on the Scottish economy by introducing price controls. At least the weather’s still good.

Nicola Sturgeon’s plan to freeze all rents in Scotland would be a disaster for Scots. Economists almost universally agree that rent control is one of the worst possible ways the government can intervene in a housing market. The short-term consequences are predictable; the policy freezes the price of renting and puts a moratorium on evictions. This makes people who have a property to rent better off; it makes people looking for somewhere to rent worse off.

The socialist economist Assar Lindbeck famously commented that ‘rent control appears to be the most efficient technique presently known to destroy a city – except for bombing’

When rents are held below market prices, two things happen.