The Shadow Chancellor has suggested that the Labour party may introduce a “right to buy” scheme to help private tenants buy their rented properties at a ‘reasonable’ price if they were to win the next election.
Shadow chancellor John McDonnell has suggested that they would consider introducing a right to buy scheme for private tenants. The concept is targeted at workers to help them buy their rental properties for a reasonable price which is not necessarily the market price of the property.
McDonnell is also suggesting that this scheme will help tackle what he calls the “burgeoning buy-to-let market” and the problem of a minority of landlords failing to maintain their properties. Labour appears to believe that the scheme if implemented could redress the problem of landlords failing to invest in their properties while continuing to collect rent.
Newspaper reports suggest that McDonnell believes that the number of landlords failing to maintain their properties is quite large. However, other landlord associations dispute this and we certainly have not seen any evidence that it is anything but a minority.
The scheme is a partial echo of the Conservative government’s flagship policy from the 1980s which saw council tenants purchasing the properties they were living in at far below market rate. However, the problem that this policy created appears to have been overlooked by the Shadow Chancellor. The right to buy scheme of the 1980s has resulted in a huge shortage of council properties across the country. The danger is that this could be mirrored in the private rental sector if landlords leave in large numbers.
With Brexit negotiations not going very well and suggestions that a general election may be called statements like this are likely to become a common occurrence. However, we will have to see whether they actually become government policies.