Is there any merit to Labour’s idea of a ‘right to buy’ policy for private renters?
James Meadway, an economist and former adviser to John McDonnell, says YES.
Labour looking into a right to buy for private tenants could be a godsend for those tens of thousands of private renters who find themselves on the wrong side of Britain’s failed housing market.
While younger people still aspire to own a home of their own, there is a whole generation for whom this is a nigh-on impossible dream. Some 65 per cent of middle earners aged 25-35 owned their own homes in 1994; two decades later, it’s 27 per cent.
Priced out of the market, unable – despite government schemes – to get a mortgage, people are pushed into renting privately, left at the mercy of their landlord. Sometimes they’re decent; too often (in our poorly regulated rental market) they’re not.
Meanwhile, landlords have enjoyed a win-win: rising property prices mean their wealth goes up at the same time as they can charge higher rents.
It’s only fair to look at ways to reduce the injustice. After decades of failure, bold action like Labour’s rental right to buy is needed.
Eamonn Ives, a researcher at the Centre for Policy Studies, says NO.
While it is heartening to hear that John McDonnell wants to widen home ownership, his medicine is worse than the disease. Forcing landlords to sell their properties to tenants at a price ambiguously deemed “reasonable” by a future Labour government should set alarms bells ringing.
Nobody should have to forfeit their property at the government’s behest, other than in the most urgent circumstances, like for the sake of national infrastructure. Applying this to private landlords is state-sanctioned theft, and will leave many wondering what the point of ownership is if the government can just seize property whenever it likes.
Instead of pitting tenants and landlords against each other, we could turn renters into owners by incentivising landlords to sell up, should they wish to.
By rebating the capital gains tax they’d pay in the process, with some going to themselves and some to the tenant to help with a deposit, everyone can win, without the state having to expropriate anything.
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