Good Homes for all in the society:
In order to compensate for the government expenses the taxes may be increased on high rent properties. This suggestion has been made as the demand of low rent houses is highly elastic whereas that of the high rent houses will be inelastic (Besanko & Braeutigam, 2007). Thus the expenses made in the form of benefits will be compensated.
Helping tenants and raising standards in the rental housing market
Several recommendations have been made to raise the standards in the rental housing market. This is recommended considering large numbers of younger households seeking homes in market rental housing. The recommendations include introduction of .self-invested private pension schemes permitted to be invested in newly developed residential property and that the property will be let on commercial open market terms and managed professionally. Further the interests of tenants have to be recognized and arrangements have to be made without impacting the rights of the landlord. Lastly appropriate development sites need to be established only for the purpose of renting. This will be exercised by special arrangements such as Section 106 wherein ‘rental covenant’ on the development can be placed. This will ensure that new homes will be made available for the purpose of renting. This power may be exercised for a specific period considering the situation. Such actions would certainly benefit in increasing the supply of rental housing.
This aspect will be beneficial for both the producers as well as the consumers of housing property. The consumers will be benefitted as the rental controls will result in ceiling price being imposed by the government. Further the ‘rental covenant’ that enables long term rental contracts will improve the valuation of property and address the valuation issue as a result of the asset being valued on its rental income stream rather than the potential vacant possession value. The ‘rental covenant’ may be considered negative action but an insight shows that it will result in a better development of the housing industry.