Front Page Titles (by Subject) Rent Regulation - Literature of Liberty, July/September 1979, vol. 2, No. 3
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Rent Regulation - Leonard P. Liggio, Literature of Liberty, July/September 1979, vol. 2, No. 3 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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“The 1974 Rent Act—Some Short Run Supply Effects.” The Economic Journal (UK) 88 (June 1978): 331–342.
The 1974 Rent Act (UK) on the furnished rental housing sector in Glasgow replaced the Rent Act of 1965. The latter distinguished between furnished and unfurnished lettings and provided security of tenure to unfurnished tenants. Rents of furnished accommodation were generally market determined and tenants had limited security of tenure.
The 1974 Act did not alter unfurnished lettings very much but made substantial changes in furnished lettings: they were regulated in the same manner as unfurnished lettings. Rents were to be “fair rents” assessed by rent officers and were defined as rents established in a free market without a scarcity premium. The fair rent criterion is theoretically imprecise and vague in its possible interpretations. The rent officers operate on an average cost pricing basis. This might seem unlikely to drive out landlords. But there are some difficulties. By giving tenants security of tenure, the 1974 Act increased the risks of letting and reduced the certainty of future returns, and reduced the landlords' ability to dispose of their property in their own way. Since landlords, who usually are small investors with two or three properties, often have a specific disposal date in mind (i.e., retirement from the labor force) this increased uncertainty might be expected to influence investment and letting decisions. In particular, landlords may adopt letting strategies which reduce the effective security of tenure provisions, for example, by letting only to transient tenants.
Surveys indicate that the 1974 Act did, in fact, reduce the supply of furnished properties. This reduction has not been counterbalanced by an expansion in municipal property available for letting. Consequently, those who wish to obtain furnished lettings are trapped between the effects of the Rent Acts and intransigent policies on municipal letting. Paradoxically, the attempt to reduce the power of the landlords results in a reduction in supply and an increase in excess demand. This may actually increase the power of landlords over their tenants. The current review of housing policy and the Rent Act will, perhaps, replace dogma with analysis in formulating housing policies that will be clearly defined.