Jeremy Corbyn slams landlords and demands rent controls
Radical London MP and former Labour leader has told the BBC that he wants rent controls to be added to RRB.
In an interview on the BBC’s Politics London show Jeremy Corbyn has railed against the high cost of rent and exploitative landlords and is demanding the Government puts a cap on them.
During the programme, he claimed the typical rent for a one or two-bedroom flat was £2k per month in London. And, he said, based on the principle that housing costs should be half take-home pay – renters would need an income of around £80,000 gross to be able to afford it.
He complained that the Renters’ Rights Bill doesn’t go far enough in tackling the issue and it should include rent controls.
He told the interviewer that he grew up with rent controls and that they were only ended when Margaret Thatcher came to power.
Excessive profits
He explained that there are, currently, rent controls in New York, San Francisco and many European countries.
Excessive profits are being made at the PRS and exploiting people who are in desperate housing need.”
“There is nothing wrong with them (rent controls),” he said. “It seems to me a reasonable way of preventing excessive profits being made at the PRS and exploiting people who are in desperate housing need.
“Is it good, is it right that so many people sleep rough? Don’t people have a right to a roof over their head?”
For balance, the BBC also interviewed NRLA boss, Ben Beadle, who warned that the reforms in the Renters’ Rights Bill must be fair to both renters and landlords and that, although landlords weren’t against change, or the banning of Section 21 notices, many were losing confidence in the sector.
If he says landlords are making excessive profits, then Corbyn must have some idea of what profits are acceptable, to him, but he does not say and the BBC did not ask. Looking at the figures on a letting we have just completed, 67% of rent goes on expenses, and 88% of total expenses are mortgage interest. So who gets the 33% of the rent that is left? 25% is taken by the State, leaving just 8% for the landlord. That is an effective tax rate of 76% (thanks to Progressive Chancellor George Osborne) and a return on equity of 1.8%. It turns out that the State, not the landlord, is doing the exploiting.
You can get three times that return, a 5.6% yield, on Sainsbury’s shares, and you won’t get called up in the evening by customers asking you to fix things. After all, if housing is a human right, as the lobby groups proclaim, is not food also a human right, and shouldn’t we denounce the big supermarkets for their profiteering, as they lift our food costs faster than rents? To paraphrase Corbyn, food price controls would be “a reasonable way of preventing excessive profits being made by big grocers and exploiting hungry people who are in desperate need of food”. How would billionaire Labour donor Lord Sainsbury react to that? I suspect Farage’s Reform would swiftly gain a new funder.