Labour Party plans to give tenants the right to buy their privately rented home should be debated extensively, says lettings payment automation provider PayProp.
This issue is due to be discussed at the Labour Party’s annual conference, which begins on 21st September.
Controversial plans unveiled by Shadow Chancellor
It was earlier this month that Shadow Chancellor John McDonnell announced plans for a private rental sector ‘Right to Buy’ scheme that will allow renters to purchase their homes from private landlords.
He informed the Financial Times that tenants would be able to purchase homes 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’.
However, this is a worry that this scheme could lead to a mass buy-to-let selloff, causing property values to plummet.
Neil Cobbold, Chief Operating Officer of PayProp UK, says: “These proposals are not yet party policy and 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.”
A fair system needed for all parties
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 says any ‘Right to Buy’ measure should be voluntary for landlords, or else it would amount to a ‘form of compulsory purchase’.
Cobbold says: “There is nothing wrong with giving private tenants the option to purchase properties from landlords, but any such system must provide benefits for both parties.
“Private 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 from these measures in exchange for selling their properties to tenants, this could create a scenario that is fair for both sides of the transaction and benefits the overall health of the UK property market.”
Party conference season reinforces housing priority
The Liberal Democrats debated scrapping Section 21 at their conference last week. The Conservatives are also expected to discuss the eviction issue – as well as agents’ referral fees – at their annual gathering in Manchester from September 29.
Cobbold concludes: “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 at the Labour and Conservative conferences as they 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.”