I am beginning to wonder what I’ve done to offend this government. Firstly, David Cameron misjudged the mood of the electorate and triggered Brexit. As a direct consequence, fifteen of the estate agency business sales that I had arranged fell through. I spent four months putting most of these sales back together again only to see them disrupted again by the tenant fee ban. This is irritating for me but catastrophic for the hardworking business owners whose retirement plans are disrupted.

In the medium-term, I am confident that the market for letting businesses will soon recover. Brexit will have no impact on the size of the UK letting market – if people don’t have the confidence to buy a new home, they will rent one and the letting market could grow.

It’s an insecure government bringing in populist measures to curry favour with marginal voters.

The ban on tenant fees is more worrying; it’s unlikely to have a long-term impact as the typical letting agent currently derives about 15 per cent of their income from letting fees. They also make a profit margin of around 15 per cent of turnover. It is therefore utterly impossible for letting agents to bear the cost of the tenant fee ban – it would reduce their profit to zero. The fees will have to be passed to landlords who will inevitably pass them on to tenants. This happened in Scotland and my clients there have the figures to prove it. It will inevitably happen in England.

POPULARITY

What worries me more is why such a misguided policy was announced in the first place. It’s evidence of an insecure government bringing in populist measures to curry favour with marginal voters. It’s not in the long-term interests of the housing market or the country.

I am reminded of two teachers who taught my daughters in their first year at secondary school. One bought gifts for her pupils every day and let them do what they pleased. They liked her but quickly lost respect for her and she left. The second teacher, a strict disciplinarian, was disliked and admired in equal measure. She went on to become the headmistress and took the school to the top of the national table.

The Government is in a very similar position. The tenant fee ban was imposed because a few letting agents were overcharging tenants. The solution was a cap on tenant fees but this would not have made good headlines so we got a ban.

This will be hugely popular with voters but it will achieve nothing. It won’t address the cost of renting a property and it won’t appease the Generation Rent. Once they realise that the fee ban led to higher rents, there is a danger that they will demand rent controls and things could start to get really dangerous.

Rent controls would be hugely popular with voters. If we had a referendum on it, the rent control lobby would win. However, rent controls would immediately destroy the housing market. There would be a stampede as landlords sell their properties and those that remained would see the value of their properties crash. This is what happened with the 1978 Rent Act – the consequences were catastrophic. Tenants quickly found that no new properties were available to rent. They were forced to buy a property, stay with parents or wait for a council house. Meanwhile, the injustices heaped on individual landlords were unforgiveable. Decent people who invested in a rental property to provide for their old age, experienced nothing less than the confiscation of their assets by the Government.

As an industry, we must mobilise ourselves now to stop the government from taking any more populist decisions that could have appalling consequences for the housing market and for the country. The only way to solve the problem of unaffordable house prices and rents is to build more houses for sale and for rental. The law of supply and demand will do the rest without government interference.

To achieve this we must speed up our appalling planning system to make more land available and to guarantee a stable market that gives private and institutional investors the confidence to invest in creating new homes. Every intervention or threat of intervention makes this more difficult to achieve. The role of a good government is to give its population the policies that they need, not the policies that they want. The Government must find the courage to resist the call for intervention and just let the market be.

Adam Walker is a management consultant, business sales agent and trainer who has worked in the property sector for more than twenty-five years. www.adamjwalker.co.uk