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You seem to be assuming your conclusion here. If what you state above is true, the rest of your argument may follow, but it seems to be a classic case of applying economic theory and then assuming that everyone is a moron for not going along with your conclusions, rather than disagreeing with your analysis.
From where I’m standing, houses have some fairly unique attributes: the supply is zero-sum in the UK as you note, everyone needs one (or a part of one, I’m including flats and things), realistically nobody needs more than one.
It is not obvious to me that making it very difficult to be a landlord would make it harder to obtain shelter. A plausible consequence of increased tax would be for landlords to sell up and the available housing stock to rise, thus lowering house prices.
As it is, we have a situation where it is entirely viable (though becoming less so) to get somebody else to pay your mortgage for you, and property serves as a useful asset for native or foreign oligarchs to store wealth. I’m not sure that this is innately desirable.
This isn’t an ‘eat the rich’ argument, or an argument for rent control. I’m just dubious about facilitating the treatment of shelter as an asset class and would like to hear your reasoning on the matter.
The whole point of the post is discussing why people disagree with one of the most agreed upon concepts (rent control is bad) in economics...
Perhaps I phrased it too harshly with respect to the OP, I didn’t mean to. My hypothesis is that disagreement is not down to Dunbar’s number but down to a widespread suspicion that most economic theory is bunk. Modern monetary theory does actually lead to inflation, outsourcing your manufacturing to China is not a free win and immigration reduces wages. So when economics say ‘slaving to pay off somebody else’s mortgage is actually good for you’ the response is not supine acceptance but suspicion.
I’m also interested in discussing the case for taxing landlords on its merits, since I have a stake in both sides of the divide and the topic interests me.
Which stems from? That would be an actual response to OP's post.
To give three examples where economists sagely assured us that the obvious conclusions were wrong and then events (global inflation, hollowing out of American manufacturing, the big rise in worker bargaining power when immigrants couldn’t be brought over during Covid) made it clear that they were wrong. I’m not saying that all economic theory is wrong, any more than all psychology is wrong, but I don’t see how you can look at the history of failed predictions and see it as anything more than a very flawed science.
MMT does not fit with the other two, because it was explicitly arguing against the economic consensus, and the economic consensus ended up being correct.
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This is explicitly what the OP said was happening several times during their post, except according to them it makes the shortage worse because the former renters buy more rooms than they were previously renting.
This may lower housing prices, but it seems like it would, paradoxically, raise rental prices for those that can't buy for some reason (don't make enough money/make money irregularly, can't get a loan, lack of documentation, need to move frequently, etc).
But each person who buys a house is taken out of the pool of would-be renters, so how is the shortage worse? The number of houses is the same, the number of people living in them is the same.
How are these people better off renting rather than paying off a mortgage? If they don’t have money or documents they’re screwed anyway. A certain number of people are not going to be able to manage in either system and will either be homeless or in government housing. I don’t see how that varies between our two scenarios.
The final about needing to move house regularly is a concern for me too. I speculate that a bigger market with more buyers and sellers might make things easier in this regard but I can’t know for sure. And at least these people would be able to get a property when they settle down rather than have spent a lifetime subsidising other people’s.
This argument presented is these people are buying formerly rented units, so those units are now forever denied to future renters. And also people occupy more square feet per person when buying than renting. And NIMBYism prevents significant amounts of new units, so we aren't going to build to make up for the loss.
Things just get a bit worse for renters. They get to fight over fewer rented square feet of living space.
Thanks, that’s an interesting nuance that I missed. It seems to me like an unfortunate consequence of large mortgages and housing-as-assets in that people usually buy houses as a conscious investment now and take out large amounts of money to do so, thus they get as much as they think they can get away with. Houses for sale also tend to be built differently from rentals because people assume that owner occupiers are starting a family.
A larger, more flexible market with less borrowed money might reduce this problem. However, I concede that’s a self-serving assertion and I can’t back it up.
This argument only works if the majority of people are renters by choice, ie that the pool of buyers and the pool of renters are inherently separate. I don’t think they are. They appear to be because of financial pressure on house buying. If you assume that would be buyers and would be renters are mostly the same people, a house being bought by someone is no different from a house that is being rented by someone. It’s removed from the pot either way. If anything, it’s an argument for punishing people who buy too much, which is the underlying logic behind most anti-landlord resentment.
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Maybe England is different but I would expect people having more rooms to result in individual rooms for rent, which trades off against demand for two bedroom and studio apartments.
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