Cognitive dissonance in action

If you want to see cognitive dissonance in action, watch the Conservative party try to develop popular housing policies without contravening its loyalty to developers, landlords or free market fundamentalism. says Matt Wilde in the Guardian.

However, he goes on, in true Guardian fashion, to produce an example of a housing benefit claimant paying an exorbitant rent for a grotty flat as evidence that the rental market has failed and that rent controls are the only answer before trotting out the following (unsupported) untruth.

But (the smallness of the pre-Thatcher rental market) was largely because most people could either afford to buy or had access to council housing, so there simply wasn’t a great demand for private rented properties. That demand had to be artificially created – largely to the benefit of wealthy investors, certainly not in favour of the state or the tenants.

If you want to see cognitive dissonance in action, read The Guardian on anything to do with housing. They are quite capable, as above, of completely ignoring how the housing market actually works, while producing their pet theories as to how it can be made to work better. They completely ignore that the bottom end of the rental market, which is dominated by social housing and housing benefit, works differently to the rest of the market. At the bottom end, as Mr Wilde points out, social housing rents kept private rents low: why pay a lot for a privately rented flat if you can get a council flat for less, but also, as he fails to mention, the positive feedback of housing benefit inflates rents in the private sector ( 1. the level of HB is set by the the average rent demanded -> 2. the average rent demanded is set by what the tenants can afford to pay -> 3. what tenants can afford to pay is set by the level of housing benefit they receive -> back to 1.) If HB was capped at the sort of rents that Generation Rent are suggesting,

The campaign group Generation Rent argues that a living rent should be no higher than 30% of the average income, and propose that controls could be set according to council tax bands. By capping rents at 50% per month of the home’s annual band, they would be brought more in line with people’s earnings.

then landlords would be forced to lower their rents to that level or have empty properties.

That, and more social housing, would sort out the bottom end of the market. As to the rest of it, why should the government intervene to help out relatively wealthy middle class tenants?