Another poor article on Spiked

Spiked is a bit of a curate's egg, supposedly sourcing articles from all over the spectrum, and publishing them without fear or favour and so on. In reality, the articles vary from hard-left and unaware that any other viewpoint exists, to a soggy just-right-of-centre semi-dryness, and the quality varies from fairly interesting to quite dull.

Too much is poor. To wit, Who benefits from housing handouts? by one Neil Davenport. Where to begin? Well a summary, I suppose: private landlords have always wanted to charge "whatever they liked for a shoddy room or flat", rent control stopped them [cheers], Thatcher's right-to-buy scheme destroyed the unity of the proletariat by taking them out of their poverty and allowing them to start accumulating capital [boos], and, most fantastically of all "with a monopoly on living space ... landlords have been able to massively increase rent prices over the past 20 years".

Say what? The average house price in the UK in Q3 1992 (a little late to represent the introduction of right-to-buy, but never mind) was some fifty-four thousand pounds (source: Nationwide). The average house price in the UK in Q3 2011 was some one hundred and sixty-six thousand pounds, over three times as much. I've left the numbers unadjusted for inflation in both cases, since presumably that was part of Mr Davenport's point; at least, he doesn't mention if he's adjusted "massively increase" for inflation. Even so, even if you use inflation adjusted house prices, prices now are still twice what they were in 1992. A fairer comparison also might be with 2011 and 1980, say, when house prices were a mere twenty three thousand pounds, so that house prices in nominal terms have actually gone up a "massive" seven and a bit times.

The point of that is that, in this country at least, private landlords must take their costs, the costs of their housing stock, from the market. Which, also in this country at least, they do not dominate. House prices here are dominated by the owner-occupier market, and the price of investment residential property tags along in lock-step since it is, in all respects, exactly the same stock, at least as far as private landlords are concerned. It would be much more informative if Mr Davenport were to look at the return on capital in the residential rental market over the period 1990 (say) to 2011; but that, alas, he does not do — probably because those numbers are hard to get and, in any case, irrelevant to having a good old, if terminally unenlightening, bash at the capitalists.