Property News. From Moving In.

Labour Right To Buy policy dismissed as “damaging and distorted

As the row over Labour’s proposal rumbles on the think tank Centre for Policy Studies - which has previously argued that landlords should be incentivised to sell to tenants - called the new plan “a damaging and distorted version” of its own idea.

Earlier this week Shadow Chancellor John McDonnell infuriated lettings industry trade groups by suggesting private tenants would be given the right to buy their property under a Labour government. 

This could be at a discount, and even if the landlord doesn’t want to sell.

Some years ago a former housing and planning adviser to 10 Downing Street, Alex Morton - now head of policy at the Centre for Policy Studies think tank - argued that landlords should be incentivised to sell to tenants, to redress the rise in buy to let and fall in owner-occupation in recent decades.

But commenting on Labour’s version of this, Robert Collie - CPS director - says: "It is gratifying that Labour appear to have been reading the Centre for Policy Studies' recent work setting out a way to help renters buy their home - but they seem to have completely missed the point.

"The big story of the housing market in recent years has been a surge in private rental at expense of owner-occupation. It is vitally important to reverse that - for example by incentivising landlords to sell to tenants through CGT reliefs for both (a policy which our research has shown is practical, affordable and highly popular).

"But it is equally vital that this is done in a way that is fair - to tenant and landlord alike. Labour's proposed 'right to buy' for private tenants appears in effect, to be the expropriation of private property, and is likely to have all kinds of unintended consequences."

Mystery surrounds some details of Labour’s proposal.

In 2015 the party leader Jeremy Corbyn suggested that tax allowances for landlords - then thought to be worth a total of £14 billion - could be used to subsidise the sale of private houses and flats to tenants. 

However these tax allowances have been substantially reduced in the meantime, raising question marks over what kind of discounts would be introduced by a Corbyn government and to how they would be funded.

Meanwhile the Daily Mail has tracked down a second home owned by John McDonnell.

The newspaper, having scrutinised Land Registry documents, says McDonnell paid some £135,000 in cash for a two bedroom wooden bungalow with 63 years remaining on the lease. 

It sits alongside the Norfolk Broads at what the Mail calls “the holiday village of Potter Heigham” and comes with a small timber jetty.

From photographs published in the newspaper and online, the property is clearly modest and is not let out by the Shadow Chancellor, although it is suggested nearby similar homes fetch £350 a week in winter and £700 a week in summer when let to tourists.

 

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Original Source: Letting Agent Today.

Original Author: Graham Norwood.

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