Why economic illiteracy is the greatest danger facing landlords

The private rented sector in the UK is currently facing an existential threat, not from market forces, but from a persistent, dangerous economic illiteracy taking root in local and central government.

As England’s landlords cautiously navigate the complex compliance requirements of the Renters’ Rights Act, a new breed of politician has emerged in the recent local elections.

This is someone who views property not as a business asset, but as an ideological battleground.

Take, for instance, the recent rhetoric from Hackney’s deputy mayor, Dylan Law.

In an interview with Politics JOE, he said: “I don’t see why any landlord is making profit off rent, off housing. If I pay rent to my house, it is for a human right. I’m paying just to maintain that home. I think that should be the basis. So if it has to be a thing where a two-bedroom flat literally is £600 maximum then it is what it has to be. And for all the landlords who complain about that…it’s tough luck.”

Don’t believe that someone like that can be elected to a position of power in local government? Then watch the first 18 seconds of his interview. The shrug at the end tells its own story.

£600 rent cap

The hard part for me is that lots of people hear this nonsense about rent controls and agree with him. There’s no doubting what he says.

Dylan’s suggestion that the rent for a two-bedroom flat should be capped at £600 is not just detached from reality; it is beyond economically illiterate.

He is saying this in a borough where average rents are £2,600, so suggesting a 75% reduction is not a housing policy; it is a de facto eviction notice for the entire private rented sector in that area.

When politicians propose such simple ‘solutions’, they betray a fundamental misunderstanding of how the world works.

They also ignore the most basic law of economics: when you artificially suppress prices below market value, you destroy supply.

There’s no appreciation, naturally, of a landlord who cannot cover their mortgage, pay maintenance or meet their tax liabilities because of a politically motivated price ceiling.

Landlords will not suddenly find a way to operate at a loss. They will sell.

And when they sell, those properties are often removed from the rental market entirely, usually bought by owner-occupiers and not by other landlords who face the issue of not being able to make the home pay for itself.

Having a ludicrously low rent cap means landlords will be subsidising the rent and going hungry while someone lives the high life in their prized asset.

Rent controls don’t work

The ideology also ignores the real-world fact that rent controls have never worked anywhere.

Property118 regularly highlights this because the result is always the same: a decline in the quality of housing stock, a black market for rentals and a severe shortage of available homes.

Despite this mountain of evidence, we are seeing this virus spread.

Scotland is currently legislating for a restrictive rent cap framework and in Wales, the debate remains volatile and was an issue raised in Senedd campaigns.

Landlords in Northern Ireland are aghast at the increasingly flirty noises being made for similar populist price-fixing measure, even after its government implemented a one-increase-per-year rule.

Landlord rising expenses

For the professional landlord, the Renters’ Rights Act was already a significant hurdle and then we have the EPC debacle on the horizon.

Its expensive mandate to force all rented homes to reach an EPC C rating by 2030 really threatens the viability of older housing stock.

When you layer the cost of mandatory energy upgrades on top of restricted rental yields and the threat of arbitrary local rent caps, the result is a perfect storm that will force thousands of small-scale landlords to exit the market.

Why do voters support this?

Because it is easier to sell the dream of ‘affordable rent’ from exploitative landlords than it is to address the difficult reality of supply.

It is a seductive, populist narrative that paints landlords as villains to avoid the uncomfortable truth that our housing crisis is a decades-long failure of planning, construction and fiscal policy.

No more posturing

We must move past the Green Party style of ideological posturing.

If these politicians truly cared about renters, they would focus on incentivising new builds and reducing the tax burden that makes high rents necessary.

Instead, they pursue policies that punish investment and destabilise the very sector that provides housing for millions.

Landlords are not the problem; we are the essential providers of a service that the state has consistently failed to supply.

If we allow ideology to override basic economics, we aren’t just driving landlords out of the market, the same zealots will be systematically evicting the tenants who rely on us to survive.

It is time we made the economic case for our survival, loudly and clearly before the ignorant among us really do bring an end to the private rented sector as we know it.

Then they will have something to shrug about.

Until next time,

The Landlord Crusader