Not at all – quite the opposite. Providing tenants with permanency will incentivize them to take pride and care in the property they occupy – it is their home, no longer just a short term flat. So long as the rents are free to settle at market they will reflect the balance of acceptable return and acceptable cost.
In conjunction with our tax reform the incentive to land bank or speculate on housing will vanish, leaving rental income as the chief reason to own property. This will provide a strong incentive to build and rent out accommodation.
Landlords will be able to charge market rents, but without rapidly increasing land and house prices we expect these to stablise at a reasonable rate of return for landlords.
Given the high prices and prospect that many face of being tenants for life, offering them stable, warm and dry housing stock is merely levelling the playing field.