First Berlin comprehensively proved that rent controls are disastrous for the housing market; then Ireland followed suit destroying their housing supply with their “rent pressure zones”, resulting in one case of a 150-person queue for a three-bedroom home in Dublin. Despite these real-world cases of rent controls doing exactly what free market theorists warned they’d do, last Thursday the Scottish Government ignored all the warnings and pushed through legislation freezing public and private rental prices until the end of March 2023. What was it Einstein said about insanity?
It appears the chickens have come home to roost in less than a week. Today The Times reports that as a direct result of the rent freeze, Lord Haughey has halted a £1 billion plan to address the housing crisis by building 11,000 affordable homes.
Can the SNP-Green coalition able to dodge blame in any way? Is Lord Haughey being vague in his blame? Not quite…
“Patrick Harvie’s rent freeze is a big part of my decision [to halt the project]. The housing market is in absolute crisis and without any plans on how to address it that crisis can only get worse.
“I planned over the next ten years to build 11,000 houses – houses that people can be proud of. I was trying to build communities and I wanted to build 1,200 sq ft homes that people would rent for about £695 per month with maintenance bills included to help people keep their energy costs down. But two things happened,” he said, alluding to a notification from his bricks supplier that costs had increased by 28 per cent.
“Add to that Patrick Harvie’s rent freeze bill and I am going to put things on hold. There is no incentive whatsoever to try to make a difference.”
“Patrick Harvie will go down in history as the man who stopped investment and added to the calamitous lack of housing we have in Scotland, 100 per cent. Don’t take my word for it — the house associations are calling for [the Bill] to be scrapped.”
Guido can guarantee you this third example of market failure following rent caps will do nothing to stop Sadiq pursuing the calamitous policy in London…