Fraser Nelson Fraser Nelson

Rents are falling, in real terms. So why does Ed Miliband want state intervention?

In recent weeks, I have found myself defending Ed Miliband as much as attacking him. I do believe that his election would be a calamity for Britain, but that doesn’t mean I think he is an idiot pursuing a stupid strategy. On the contrary, I think what he is doing is bold, coherent, radical and chimes with the emerging populist mood. I also think that it is working – as things stand, he is on course to become the next Prime Minister. I look at this in my Telegraph column today.

The rent control policy announced yesterday embodies this bold populism. Britain has a problem with buying houses – one created, in my view, by government policy to keep interest rates nailed to the floor during an economic boom. But low rates also make favourable terms for buy-to-let, and rents have been falling in real terms even in London. The below graph gives some idea of how things have been getting better:-

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Bizarrely, Miliband has audaciously claimed there is a massive rental problem that can only be resolved by state intervention. So he will tell landlords to offer three-year contracts, and put a cap on annual rent increases. He’s inviting voters to blame their troubles on rapacious capitalists, and posing as the bold avenger. Give him a pint of beer and he’d be Nigel Farage. I don’t mean this as an insult – all parties are under threat from UKIP. It’s a good thing that in our democracy they are forced to respond. Miliband is doing so by embracing leftist populism. Farage has shown you can win back abstainers, if you persuade them you have an agenda to really shake things up. Miliband is showing such voters that he would do some shaking too.

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