Labour has been accused of trying to kill off the private rented sector after it resurrected its idea of extending Right to Buy to the private rented sector.
Critics said it amounted to nothing less than the compulsory purchase of properties from private landlords. Others called it a ‘cash raid’ and theft. A poster on EYE yesterday asked people to switch off the light on their way out.
Under the proposals, tenants would be able to buy properties from their landlords at a discount – with the pricing criteria set by the Government.
Shadow chancellor John McDonnell told the Financial Times that he wants to “tackle the burgeoning buy-to-let market”.
Of the price that private tenants would pay to buy their homes, McDonnell said: “You’d want to establish what is a reasonable price, you can establish that, and then that becomes the right to buy.
“[The Government] set the criteria. I don’t think it’s complicated.”
McDonnell also said he would raise taxes to be paid by private landlords, and he hit out at the “large number who are not maintaining” their properties and are causing overcrowding.
David Smith, policy director of the Residential Landlords Association, said: “Labour’s proposal would effectively kill off a large part of the private rented sector, denying a home to many thousands of people.
“If there was to be any chance of this becoming law, there would be a mass sell-off of properties in advance.
“The RLA is all in favour of landlords selling to sitting tenants but it must be entirely voluntary.
“Anything else amounts to a form of compulsory purchase.”
David Alexander, joint managing director of property management firm Apropos by DJ Alexander, said: “This is effectively a cash grab from the PRS.
“The State valuing private property and effectively compulsorily purchasing it would cause the market to collapse and have an enormously negative impact on the housing market as a whole, as individuals and investors would lose faith in the viability of property.
“Lenders would be unlikely to provide loans to fund the purchase of these properties as values would be in freefall.
“Why would anyone invest in property either as a landlord or as an individual if the value of the sale price could be anything the government wished to pay?”
Tory MP Michael Fabricant said that McDonnell’s “manoeuvre” would “decimate the rental market in the UK, creating a shortage of properties available to rent”.
Another Tory MP, Andrew Bridgen, said: “This is a frightening insight into what it would be like if this man ever became Chancellor of the Exchequer.
“These policies would destroy the private rental market as well as crash the entire housing market.
“It would also lead to a rise in homelessness, which Labour claims to be against.
“It’s true to his delared ambition to destroy capitalism.”
Labour has already said it would introduce rent caps on private rented housing.
The idea of giving private tenants the right to buy was first proposed by Jeremy Corbyn four years ago during his leadership campaign. (Link to EYE story in June 2015 below.)
Were it to become party policy and were Labour to win the next election, it might not prove popular with the MPs who are private landlords –there were 123 according to FactCheck in July 2017.
According to the 2018 parliamentary register of MPs interests, private landlords sit on both sides of the Commons and include Labour’s Emily Thornberry and Keith Vaz.