Labour Party Conference: Right-to-buy plans should be considered carefully
Neil Cobbold (pictured) is chief operating officer of PayProp UK
The Labour party’s plans to give tenants the right to buy their privately rented home should be debated extensively at their annual conference on Saturday 21 September.
Politicians should take the opportunity to consider all pros and cons of the proposals before turning them into party policy.
Earlier this month, Shadow Chancellor John McDonnell revealed proposals for a private rented sector right-to-buy scheme that would allow private tenants to purchase rental properties from their landlords.
He told the Financial Times that renters would be able to purchase properties below market value at criteria set by the government.
McDonnell said the plans would aim to prevent landlords who neglect to maintain their properties from making a ‘fast buck’.
The idea has been widely criticised by property industry figures, who suggest that a scheme of this sort could lead to a mass buy-to-let selloff and cause property values to plummet.
The proposals are not yet party policy. Therefore, they need to be considered very carefully before being put forward as the official party line.
The effort to help tenants buy their own homes is understandable, but it shouldn’t be at the expense of landlords.
Politicians must also remember that many people now choose to rent due to the flexibility and lifestyle benefits it offers.
The Centre for Policy Studies has suggested that landlords should be given incentives to sell their properties to tenants, including Capital Gains Tax rebates.
Meanwhile, the Residential Landlords Association has said that any right-to-buy measure should be voluntary for landlords, or else it would amount to a ‘form of compulsory purchase’.
There is nothing wrong with giving tenants the option to purchase properties from landlords, but any new system must provide benefits for both parties.
Landlords have been hit with a range of tax changes in recent years, including additional stamp duty and the removal of buy-to-let mortgage interest tax relief.
If landlords were offered some sort of exemption in exchange for selling their properties to tenants, this could create a scenario that is fair for both sides of the transaction.
Housing has been a regular topic of discussion during party conference season in recent years and 2019 will likely be no different.
The Liberal Democrats debated scrapping Section 21 at their conference, while the Conservatives are also expected to discuss the eviction issue at their annual gathering in Manchester from September 29.
This year, with a potential General Election in the offing, the stakes at party conference season are higher than usual.
We expect to see lots of talk on housing as politicians look to form key policies ahead of a potential campaigning period.
New housing policies – and those covering the private rented sector in particular – could be pivotal in securing key votes in the coming months.