3 Sep

equity release

Labour’s radical right-to-buy proposal for private tenants

Political parties often put forward radical housing policies when they are in opposition. And the latest proposal from the Labour Party certainly counts as a fundamental change in the housing market.

Revolutionised property market

Shadow Chancellor John McDonnell has suggested introducing a right-to-buy scheme that would pave the way for private tenants to buy the home they rent from their landlord. There are an estimated 2.6 million private landlords in the UK. The original right-to-buy scheme was introduced in the early 1980s by the first Thatcher government, giving millions of council tenants the ability to buy their home and revolutionising the UK property market. However, it’s now estimated that 40 percent of council homes sold under right-to-buy are now owned by private landlords.

Set criteria

Mr McDonnell told the Financial Times that tenants could be allowed to buy the home they rent at less than market value. He added: “You’d want to establish what is a reasonable price, you can establish that and then becomes the right to buy. You [the government] set the criteria. I don’t think it’s complicated. “We’ve got a large number of landlords who are not maintaining these properties and are causing overcrowding and these problems.”

‘Moment of reckoning’

However, the proposal has sparked a fierce reaction against the idea from associations representing landlords. ARLA is the professional and regulatory body for letting agencies, with more than 9,000 members. In its response, ARLA said private landlords would face a moment of reckoning that would be “totemic” as the original right to buy policy.

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