People aren't quite grasping how markets work

That Jezza and Labour are now promising everything to all - rent control being the latest nonsense - isn't all that much of a surprise. That's politics after all. But it is worrying that people just aren't grasping why so much of what is being promised is nonsense:

He did it because villainous letting agents encourage owners to do so, insisting on “market rents”, which they alone seem to set, and which are often much higher than levels of frozen local housing allowance, and devised without inspecting the property (my own rentier has never seen the flat and lives in another city, so it’s no surprise he relied on the agent’s viewpoint).

Market rents, like any other market price, are simply the balance of supply and demand. And something that most seem not to be aware of:

Main points

Private rental prices paid by tenants in Great Britain rose by 1.6% in the 12 months to August 2017; this is down from 1.8% in July 2017.

In England, private rental prices grew by 1.7%, Wales saw growth of 1.3% while Scotland saw rental prices increase by 0.3% in the 12 months to August 2017.

London private rental prices grew by 1.2% in the 12 months to August 2017, that is, 0.4 percentage points below the Great Britain 12-month growth rate.

Rents are rising by less than the general inflation rate, by less than wage growth. That balance of supply and demand seems to be working in favour of tenants then.

Further, it most certainly is not true that "market rents" are simply numbers being made up, not by anyone. It would, of course, be rent controls which are simply made up numbers.

Prices simply are not random numbers allocated as we wish. They're the vital information about who wants what so much, who is willing to supply what is wanted. As such we mess with them at our peril.

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