Your question that I answered wasn't about LVT, so shoehorning LVT back in here seems irrelevant.
If your question is, AH BUT SOMETIMES THEY DONT INCREASE RENT ALWAYS SO MAYBE THEY WONT INCREASE IT WITH AN LVT. But we are talking about a situation where the cost to supply a rental property has increased dramatically.
Landlords will fit into 2 categories.
1. Landlords who can absorb the cost.
2. Landlords who cannot absorb the cost.
Landlords have 3 options.
1. Try and absorb the cost.
2. Pass on the cost through increased rent (possibly leaving the property untenanted)
3. Sell
Landlords who cannot absorb the cost either need to pass it on or sell. Theres no "absorb it" long term for them. Likely the vast majority will try to pass the cost on before doing so.
The question remains whether landlords who can absorb the cost, increase prices. If enough of the market bites on the rent increases they likely will.
Also, there's another leg here. If significant numbers of landlords remove their properties from market, scarcity will drive up rental prices anyway. We literally did this to ourselves years ago when we removed negative gearing. Negative gearing has a tendency to drive up rental prices, but it also drives up supply of rental properties. We removed it for a year or two and the result was a dramatic increase in rental prices due to lack of supply. Renters cannot become home owners fast enough to ensure elastic demand, that's why house ownership : rentals is often seen as arbitrage. You take a product from one market and make it available to consumers in another market.
> If significant numbers of landlords remove their properties from market, scarcity will drive up rental prices anyway.
unless you're imagining they're destroying the property, you cannot "remove" it from the market (or they decide to leave it vacant deliberately - an illogical a choice as destroying the property).
If they sell to a owner occupier, it removes that buyer's original rental demand, by the same amount as the removal of the rental property from the market.
If they live in it themselves, it's the same (just no money changing hands).
Its not that the house is destroyed, its that they aren't spherical cows that immediately exist on the sale market. Renters cant become owners instantly. Landlords cant sell properties instantly. These things take time. Housing is not a perfectly elastic market.
