Looks like that rental problem is being solved
The Guardian gives us another whingefest over the price of rental housing currently. To which the correct answer is yes, we know there's a problem, so, what are we going to do about it? Stop concentrating, for a moment at least, upon the ghastly inequity of it all and tell us how to solve it.
At the end of which whingefest we're told:
Last year, the Association of Residential Letting Agents (Arla) said: “We expect the situation to only get worse for tenants when inevitably the costs are passed on through higher rents.”
The good news is that Arla was wrong. The average UK rent rose by just 0.75% in the past year, and fell in London, according to the Landbay Rental Index. Landlords need to remember that they can huff and puff about squeezing tenants for more rent, but tenants have only got £23 left.
Real rents are falling and even nominal rents in London are. Hmm, so, something is being done and the problem is, however slowly and hesitantly, being solved. That's good then, but how?
As it happens a builder has just released its results:
Telford Homes plans to increase the number of rental homes it builds as demand from investors to enter the sector intensifies.
The company will develop more so-called build-to-rent schemes in London over the coming months, and its board “continues to evaluate” whether a formal partnership with an investor could enable it to build rented homes more quickly to grow its division.
“We are increasingly being approached directly by institutions and rental operators seeking investment opportunities and each trying to achieve significant scale as swiftly as possible,” the company said.
Chief executive Jon Di-Stefano said the amount of money targeting the sector was "phenomenal".
Large scale investors are, well, investing we suppose, in the sector. Putting their money to work in building housing that people can then rent. Prices of rental housing are, concurrently, falling.
Perhaps, just a possibility, all that stuff about markets actually works then? The price of something is determined by that intersection of supply and demand. Increase the supply and the price falls. Sure, it's all most unpopular to believe such neoliberalism but it does seem to be a reasonable description of reality, doesn't it? Build more housing and housing becomes cheaper.
Note what is not necessary for this to happen. That the house built be determined to be "affordable," that tax money be used to build them, that they be not for profit, nor even that the developments be centrally planned by the wise oracles who would determine our lives. Simply allow that market red in tooth and claw to operate - here, by actually allowing people to build stuff - and we get to solve those problems of a shortage of supply and the consequent high prices.
The first two pages of every economics book ever are correct then. Now all we've got to do is run the rest of the country in accord with that basic insight about our species and this universe.