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How to reduce available rental housing and push up rents

Summary:
The terms upon which a contract is struck do rather change the price at which it is concluded. We just say this with the Stagecoach/Virgin negotiations over a rail franchise. Being left with unknown and possibly open ended charges to fill a pensions deficit meant that no price could be reached at all.Which is the sort of thing that should be kept in mind when contemplating this:Landlords will no longer be able to evict people at short notice without good reason under plans to create “open-ended tenancies”.Theresa May will bring an end to "no fault" evictions which give tenants as little as eight weeks' notice after their fixed term contract has come to an end.Landlords will instead have to take tenants to court and provide “legitimate reasons” for removing people from their properties.The

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The terms upon which a contract is struck do rather change the price at which it is concluded. We just say this with the Stagecoach/Virgin negotiations over a rail franchise. Being left with unknown and possibly open ended charges to fill a pensions deficit meant that no price could be reached at all.

Which is the sort of thing that should be kept in mind when contemplating this:

Landlords will no longer be able to evict people at short notice without good reason under plans to create “open-ended tenancies”.

Theresa May will bring an end to "no fault" evictions which give tenants as little as eight weeks' notice after their fixed term contract has come to an end.

Landlords will instead have to take tenants to court and provide “legitimate reasons” for removing people from their properties.

The Government said it was taking action to end no-fault evictions because it is one of the biggest causes of family homelessness.

Back when tenants could only be got out for reasons to be proven in court we had pretty much no private rental market. It was the introduction of assured shorthold tenancies which recreated this vital part of the economy. What this change does is take us back to those bad old days - some of recall trying to find somewhere to live in them - when it wasn’t rent which was the problem, it was finding physical space available at all.

This will reduce the number of properties put on the rental market, that will lead to higher rents. For whatever the contract says we’re still not changing the laws of supply and demand.

There is a much easier method of gaining the same professed goal. Just allow those extant contracts to be for longer periods of time. Those who desire the greater certainty will be able to get it by paying for it. And if that’s what they actually want then they will.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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