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Many economists, from across the political spectrum, warned of the unintended consequences of rent control policies before the SNP administration decided to proceed with them. International examples of similar schemes provided all the proof necessary that they simply don’t achieve what policymakers hope.
In Finland, for example, decades of state-controlled rental caps on the private sector resulted in a plethora of ingenious ways of avoiding regulation, as well as tax on rental incomes. By the 1990s, rental supply was crumbling.
Even in Helsinki – where higher prices meant landlords arguably had the most incentive to stay in the market – the number of rental properties fell by 11pc between 1975 and 1985. After rent controls began to be lifted in 1993, the number of properties available to renters increased by 45pc in a decade.
And there is an additional cost to the Scottish (and UK) taxpayer of the unintended consequences of the Scottish government’s rent control policies: in the face of loud demands from the third sector for increased resources to deal with the “crisis”, it is spending £3.5bn in the current parliamentary term to pay for 110,000 new affordable homes by 2032, 70pc of which will be earmarked for social rent.
This policy is entirely in line with the SNP’s philosophy in government ever since it took office at Holyrood in 2007: to produce policies that, however negative the consequences in the long run, provide positive headlines in the short-term.
It’s why rules initially brought in to regulate short-term holiday lets in the capital, and extended throughout the entire country, have had a devastating effect on the market, with large numbers of private renters withdrawing their properties, leading to the inevitable destructive effects on local tourist industries.
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The SNP socialist housing policy has descended into chaos – inevitably
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Many economists, from across the political spectrum, warned of the unintended consequences of rent control policies before the SNP administration decided to proceed with them. International examples of similar schemes provided all the proof necessary that they simply don’t achieve what policymakers hope.
In Finland, for example, decades of state-controlled rental caps on the private sector resulted in a plethora of ingenious ways of avoiding regulation, as well as tax on rental incomes. By the 1990s, rental supply was crumbling.
Even in Helsinki – where higher prices meant landlords arguably had the most incentive to stay in the market – the number of rental properties fell by 11pc between 1975 and 1985. After rent controls began to be lifted in 1993, the number of properties available to renters increased by 45pc in a decade.
And there is an additional cost to the Scottish (and UK) taxpayer of the unintended consequences of the Scottish government’s rent control policies: in the face of loud demands from the third sector for increased resources to deal with the “crisis”, it is spending £3.5bn in the current parliamentary term to pay for 110,000 new affordable homes by 2032, 70pc of which will be earmarked for social rent.
This policy is entirely in line with the SNP’s philosophy in government ever since it took office at Holyrood in 2007: to produce policies that, however negative the consequences in the long run, provide positive headlines in the short-term.
It’s why rules initially brought in to regulate short-term holiday lets in the capital, and extended throughout the entire country, have had a devastating effect on the market, with large numbers of private renters withdrawing their properties, leading to the inevitable destructive effects on local tourist industries.
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