Labour has hinted that it will bring in ‘right to buy’ for private tenants – but that it will restrict the policy to larger landlords.
Shadow chancellor John McDonnell was asked by The Times about its controversial policy, saying it had raised concerns that landlords would be forced to sell off their properties at below market rates.
The Times said that McDonnell has now decided that the policy should not apply to those who only own “one or two” rental properties.
He told the paper: “There’s a large number of individuals or families who have bought another property as their asset for the future and we wouldn’t want to endanger that.”
However, critics said that Labour’s amended right to buy policy would still seriously harm the sector.
David Alexander, of property management firm Apropos by DJ Alexander, said: “The shift appears to be aimed at placating individuals and families with smaller property investments and focusing on large scale investors.”
“However, the policy of buying anyone’s property at a price decided by government rather than market value would instantly destabilise the whole housing market.
“Equally it is unclear how the Government could guarantee that any tenant would be able to gain a mortgage on a property whose value has been decided arbitrarily.
“What would the real value of any property be if the Government can intervene and price it on a whim?”
He went on: “The target now is institutional and large-scale investors who will undoubtedly leave the marketplace in their droves if their investments can be undermined so easily.
“The property market requires long-term confidence and certainty and these policies would immediately challenge this.”
McDonnell also told The Times that under Labour, discounted homes would be offered to first-time buyers with mortgage payments kept at no more than one third of average local incomes.
However, Alexander said this would be difficult to apply, due to regional variations. Some areas would have enormous discounts with potential long-term gains, which would not be the case in cheaper places.
He said: “Every time government tries to intervene in markets, there are unintended consequences.”