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.
Labour leadership contender wants Right to Buy for private tenants
Comments (23)
Not to worry Dianne Abbott will work out the mortgage payments
Every time Corbyn or McDonnell open their mouths they lose Labour more votes – long may it continue!
So I rent my own home and go travelling only to come back to find my tenants have lodged a right to buy…..lol
And at a value the government decide is fair…presumably much lower than it’s actually worth…
Now this is the main pain point isn’t it? Everything else is just a smokescreen. The government likes money and better than that all governments love people owing them money. Isn’t it within the realm of possibility to give the tenants right to buy (landlords consent included) + (qualified tenant) property at market value..within reason. Get the tenants paying the government back over time. Sure this may screw over some lenders but it will keep money in circulation right?
Isn’t Labour’s point of view the fact that most of these sitting tenants are in fact already paying the mortgage for these properties and then some on top for the right to live? It’s obvious they’re not thinking of the landlord but that’s the point of a democracy right? Dialogue. Not doom and gloom predictions like it constantly seems to be on here. We should be discussing how to make it work for all parties involved which we dont seem to be doing of late.
There’s more to it than simply paying the mortgage. There’s insurance, maintenance, keeping a clean credit score for years prior, saving for a deposit, surveyors costs, mortgage fees, conveyancing charges, delayed gratification etc. There’s not a hope in hell any of my few hundred tenants could afford to run a house, even if I gifted it to them! They would no longer receive housing element UC and simply not afford or have the wherewithal to carry out the necessary maintenance. They’d be run down in less than a decade. And the fact we’re 4 million properties short (and rising), at what point are we going to accept that is definitely not LLs fault and the answer is STILL for Govt. to get on and build? If Labour seriously want LLs gone, then compulsory purchase at the market value plus compensation, ban BTL altogether and then do what they want with the properties…but don’t expect any problems to be solved. They want to partially (and by that I mean barely at all) tackle the problem using someone else’s money.
MrEchoNumber It is working for everyone. If they (tenants) feel they are paying the mortgage move out and buy your own property – that seems quite simple to me. Why should they buy (or have a right to buy) a property I own ? well yes they can but only if I wish to sell it to them at a market rate. They can afford to buy elsewhere then go and buy elsewhere. What is so unfair about that??? Keep bashing landlords and you take away the CHOICE and that is NOT making it work for people who presently have little choice. Thatcher’s right to buy was a vote buying excercise which has now proved to have been a bad choice for housing. The left wing lunatics are doing the same in reverse stealing from people who have invested their life savings and pensions into property which provides a roof over the head of others less fortunate or at an earlier stage in their journey through life. Life is not fair there are and have always been winners and losers – some have luck and some work to make the most of what they have – others don’t and some are purely unlucky – that’s life.
Tenants are not paying the mortgage. The landlord is and carries the full liability including the wacking great deposit to go with it. How the landlord funds the payments is another matter and trying to spin it around that it is unfair on the tenants is wrong … they are paying for the rented use of a property with very little liability and offering no guarantees.
If there was to be any chance of this becoming law, there would be a mass sell-off of properties in advance
No kidding sunshine and many companies linked to letting business (not just agents) will struggle to survive or go bust and add to the unemployment and burden on state benefits. Tax payers forced to contribute more as social housing policy would be escalated to house all those people this policy would create living on the street.
Presumably then on that note estate agency employees won’t count as ‘workers’ in this mans eyes. Ironic that they’re calling Boris the despot! I only bought rental property because I didn’t have a pension. Many of my landlords are the same so in reality how can they steal people’s pensions. I thought his manifesto of stealing by taxing people’s gardens took the biscuit but this is truly ludicrous. Labour supporters don’t like the word communism but how else can this possibly be described. I don’t think his own party support his extremism.
Mothersruin perhaps they prefer it to be called Marxism rather than communism?. Our virgin voters in the UK think utopia exists.
I rent out the house that my Father built (parents now gone), I’d genuinely rather it sat empty than be forced to sell it to any tenant. I think I’d rather burn it to the ground than be forced to do something with it, by JC or anyone else
That is why we need a proper land value tax. Then I bet you wouldn’t let it “sit empty”.
I wonder if labour can afford to provide the housing for the hundres of thousands of people who will lose their homes.
I heard an interview yesterday morning on R4, with Rebecca Long-Bailey saying that Labour want to see the ‘balance of power on housing to be in the hands of tenants not landlords, and the balance of power for business in the hands of the workers not the business owners’
For anyone who’s worked in lettings for any amount of time, the first sentence is a terrifying prospect. Especially with the likes of Shelter pulling the strings
The double barrelled Rebecca Long-Bailey should understand that, apart from the tiny minority of landlords who collect the rent with a baseball bat, the balance of power is ALREADY in the hands of tenants. She should watch Nightmare Tenants, Slum Landlords.
Firstly, this would never get through Parliament….but lets just say it did.
Whenever we sell a rental property, we always give the tenant first crack at it. Of course in almost every case, they dont have a deposit and or are miles short on the mortgage, so its a non starter. The same is going to be the case now if tenants actually had desires to buy, but many are content in rented with housing benefit paying their rent.
Secondly, this policy is probably challengable in court. What is effectively seizing private property is not as that easy.
Lastly and more scary, most of the current government housing policies started as Labour ideas, but the Tories were too scared not to introduce them so they have done so. If a general election is called anytime soon, then expect some sort of carrot dangled in front of generation rent to get them to vote Tory.
Not all tenants are renting on benefits and it would be so easy for a Labour government to bring in drip paying RTB via a contribution of each months rent payments …. meanwhile landlord additional taxable income 40%!!
Maybe it is a stupid idea but that lot in Parliament talk and do stupid things all the time, these days. If its in the Labour manifesto …. they are obliged to carry it through.
Because manifesto pledges are ALWAYS legally binding aren’t they (sarcasm)?
The only was this could POSSIBLY even be considered legally was if the Government paid the difference between OMV and the RTB price, a bit like HTB but without a “Loan”… …And that “aint never” going to happen!
“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”.
The Conservatives have had a pretty good go at achieving that themselves.
Agreed. Osborne screwed it up by failing to display the slightest appreciation of the consequences of his decisions. However this fool would destroy the whole housing and financial services markets.