John Plender writes in the FT that the Labour party’s flirtation with rent controls in London would do more harm than good.

I am not a private landlord, have recently rented in London and know a lot of under 30s who struggle to pay the rents they are being charged and to find property to rent if they find themselves the victims of arbitrary evictions.

The plight of the London renter is very real and needs addressing. The proposals put forward in the 2019 election – principally to end “no fault evictions” and to prevent the passing on of unreasonable charges by freeholders, were the right measures.

But nearly five years after making the promise, the Conservatives ran themselves out of time keeping them and those renting – either directly from the freeholder or on a sub-lease, are still in limbo.

Plender has a long memory

Concern for those at the bottom of the housing market is understandable. In the 12 months to April, private rents in the UK increased by 8.9 per cent, way above consumer price inflation at 2.3 per cent. Financial support for those struggling with spiralling rents has been progressively eroded while shrinkage in social housing since the council house sell-off in the Thatcherite 1980s has not been reversed.

The renters lot is not a happy one.

Those who think that pension contribution rates should be increased in line with the AE reforms , should consider the parlous plight of the renter who gets into arrears.We are in danger of presiding over a renting crisis that is more pressing than our pension saving crisis and more persistent. We really must do better.

But Plender’s memories of the heyday of rent controls , starting with the 1965 Rent Act to the deregulation of rents in 1989, are not pleasant. They include indolent Landlords with no appetite to maintain properties to protected tenants with no incentive to move out , purchase or trade down in later life.

Plender identifies the root of the problem as the price of the “ground” and the rents extracted from it.

The lesson here is that rent controls, with their perverse incentives, are a distraction from the reality that the housing affordability crisis stems chiefly from sky-high land prices.

Oxford university’s John Muellbauer has found that more than 70 per cent of the value of homes lies in the value of the land.

The more fruitful avenue for Labour would thus be to address the current mish-mash of property taxes that strongly favour owner-occupation against renting.

Cue the OECD’s recommendation, backed by Muellbauer, to shift from transaction taxes on property to annual taxes on land value, with appropriate deferral for cash-poor households.

As well as broadening the (currently stretched) tax base this has the potential to enhance labour mobility, reduce regional inequality, secure a bigger share of windfall planning gains for the public and curb property-based credit booms that crowd out more productive investments.

It should be calibrated to encourage greening of the housing stock.

Previous attempts to put land value tax on to the agenda have stalled in the face of vociferous opposition from landed interests.

Still difficult, no doubt, for the Tories. But why should this scare resurgent Labour, with the wind in its sails? The prizes are many and rich.