Gavin Scott wrote:Protection for tenants (and let's be clear - that is the function of housing regulation) is relatively cheap. Mains powered smoke alarms, yearly gas and electrical check-ups and extractor fans more or less cover the mandatory requirements for private letting.
The expensive part isn't regulated - redecoration, new appliances, furtniture, bathrooms, carpets and so on. A lot of that is discretionary.
Landlords tend to put in what they believe they can charge back in rental. No one is being kept out of accommodations because of smoke alarms and a gas man once a year.
Let be clear, I certainly agree that there's not going to be a mass of people who can't get rental accommodation because of the cost of smoke detectors. That would be silly. I was making a general point about the impact of excessive regulation and the need to avoid it in all contexts, not simply in the HMO-relevant market. I suspect Gavin if your landlord was subject to reviews every couple of months by relevant authorities, it would represent a substantial disincentive for them to rent out their property.
In terms of the discretionary expenditure, that's absolutely right - and entirely a good thing. It's what gives people choice when it comes to renting a property. Without that discretionary element, everyone would be living in Soviet-inspired residential blocks with no variation from flat to flat. High quality furnishings will contribute to higher rental values, and will cater to those who are on higher incomes and are willing to pay. The less that the landlord puts into the amenity of the property, the less they would expect to receive in rent (but that's not necessarily an issue, because they will also face lower costs). It enables those properties to be affordable for those on lower incomes. It is the ability of the market to cater to different needs - not regulation - which ensures that rental properties can be available to a large number of people with vastly different preferences, needs and abilities to pay.
If anything, some can't afford the free-market dictated entry-level.
Well, I would argue that there is no free-market level when it comes to property. The property market is fundamentally distorted by a range of tax and other policy distortions. There are direct effects in terms of regulations pertaining to rental properties, but also various incentives or disincentives (depending on which policies are being employed at any point in time) to buy property relative to renting. You can go a step further and assess the relative distortions between different types of investments as well - obviously where other types of investments are made more attractive, then this might result in fewer investment properties, which drives an artificial scarcity in the rental market and pushes prices up.
For HMOs, the legislation is more strict - but largely its designed to stop MANY people from burning to death - doors with intumescent linings and fire breaks being the main requirements. Across the larger number of rentals received, the price passed on to tenants is nominally the same for an individual in a small private let.
Well, that's not entirely clear to me if in just a matter of months lukey's property has been subject to three different reviews by relevant authorities. Is there really a huge safety issue with loose sink plugs instead of having them chained like a pen at a bank?
