Reader's Letter Of The Day

From the FT:

Sir, I agree with Charles Fairhurst that higher taxes on private sector landlords will drive many of them out of the property market (Letters, September 26). If that creates a declining market, it will have the hugely beneficial effect of enabling many of those now paying extortionate rents to buy their own homes.

Nigel Wilkins, London SW7.

This is not idle theory of course.

Two main reasons why owner-occupation rates in the UK increased so rapidly between 1945 and the 1970s (something we are proud of) was strict rent controls and high taxation of rental income; it just wasn't worth it being a landlord.

The other reasons for low and stable house prices and rising levels of owner-occupation were: mortgage rationing (high deposits were required and very low income multiples); lots of new construction; Domestic Rates and Schedule A (which between them acted like Land Value Tax) and the downward pressure exerted on rents by social housing (at its peak, about thirty per cent of households were in low-rent social housing).

Unfortunately, owner-occupation mutated into Home-Owner-Ism in the early 1970s once owner-occupation rates climbed over 50%. There were then more votes in abandoning rent controls; reducing taxes on rental income; NIMBYism; abolishing Domestic Rates and Schedule A; and selling off social housing.