How foolish of Ed Miliband to try to pervert the free market in housing with his rent controls. There is a slight problem with this analysis, which we have heard ad nauseam from the Conservatives and from the right in general over the past 24 hours. We don’t have a free market in housing and we haven’t had for at least 65 years, when the planning system came into being.
Yes, rent controls would come with the risk of reducing the supply of rental property, pushing up rents and creating a black market in properties sublet at lower than the officially-approved price. But the effect of Miliband’s reforms (which in any case stop short of rent control) would be extremely modest compared with the effect of the market-distortions caused by the planning system. And that is a system which has the full blessing of the Conservatives, and indeed all the main parties.
A genuine free market in housing would mean that anyone could build whatever they liked, wherever they liked.
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