Originally published on Inside Edge 2, my blog for Inside Housing
Back in 2010 a Conservative housing minister mused that a period of stable house prices would be a good thing. Six years later – and in the context of the European referendum – it would apparently be a disaster.
A report today from the Treasury warns that prices could be 10%-18% lower by 2018 if we vote for Brexit next month. It’s part of a message that a leave vote would trigger what David Cameron calls a DIY recession that would cost hundreds of thousands of jobs.
I’ll leave the wider economic arguments to others (though note this would be quite a mild recession by comparison with the recent past) and concentrate here on house prices. This may seem a minor point by comparison with the more general impact on the economy but it’s interesting that this was the aspect of today’s Treasury analysis that George Osborne chose to trail last week.
Labour’s bold move on private renting seems to be working as politics. Will it work as policy?
I’ve never been to Venezuela or Vietnam but, with due deference to Grant Shapps’s expertise on their housing systems, I do have a few observations to offer.
The Conservative chairman compared Ed Miliband to Hugo Chavez in a ludicrously overblown reaction to the Labour leader’s speech yesterday. Free market think tanks like the Institute of Economic Affairs and right-wing commentators like Fraser Nelson and Harry Phibbs joined him in condemning Labour’s supposed plans to introduce rent controls.
A quick glance at what Labour is actually proposing reveals that it owes far more to Ireland and Germany than Venezuela and Vietnam:
- A ban on the outrageous fees letting agents charge to tenants, which Labour says will save them an average of £350.
- A default three-year tenancy, from which tenants can give one month’s notice after the first six months
- The rent to be freely negotiated at the start of the tenancy with annual increases after that based on a benchmark such as average market rents.