Controlling rent ‘would cause landlord exodus’
RENTAL control in Jersey would lead to a ‘steady exodus of private-dwelling landlords’, according to the honorary president of the Jersey Landlords Association.
Robert Weston spoke out after a petition calling for rental caps to be set in the Island gathered more than 5,000 signatures this week, meaning it will be considered for debate by the States Assembly.
He said that landlords invested in property to get returns and that if those returns were threatened – by a mechanism such as a limit on what they could charge – they would simply sell up, leaving fewer rental properties and more price pressure on a dwindling supply.
Asked about the effect of stricter regulation, such as rent capping, Mr Weston said: ‘There would certainly be a steady and continual exodus of private-dwelling landlords over a period of years as their investment returns are diminished following government intervention in the form of rent capping or other methods of rent control. These have all been discredited for well over 25 years now. Prospective new private landlords would also be reluctant to invest in the private -rental market.’
Mr Weston added that the British market had shown that attempting to use rent control led landlords to sell their properties in order to reinvest their funds elsewhere to ‘avoid being caught by governmental capping of revenue or profit’.
He said that while he supported the new e-petition function provided by the States, he felt the system would benefit from comments being allowed on the pros and cons of petitions launched.
He said the current strength of feeling represented by the petition might provide an opportunity for the Island to look at the complex issue of housing and how it interacted with the economy, demographic change and population issues.
‘This could be an opportunity to consider solutions and have discussions, but there is no simple solution,’ Mr Weston said. ‘It is a complex mix.’
There are roughly 6,000 private landlords in Jersey at the moment, providing two-thirds of rental-housing stock.
While not all landlords are members of the JLA, Mr Weston said more were joining every week, as concerns grew about the potential for political interference in the market.
‘I’m getting more phone calls per week and month, with people asking, “do I sell my property?” and “what will the States do?”,’ he said.
Mr Weston said rental accommodation was well regulated by market forces and that landlords would do what they could to hang on to good tenants.
However, he admitted more units were needed and suggested that incentives should be put in place to encourage more people to invest in housing. ‘Put in rewards not punishments,’ he said.