Civitas proposed the idea in 2016.
Shadow chancellor John McDonnell made the front page of the Financial Times (FT) recently for suggesting Labour may introduce a ‘right to buy’ for private tenants.
This would give millions of private tenants the right to buy their homes, echoing Margaret Thatcher’s ‘right to buy’ policy which gave council tenants the right to buy their homes in the 1980s.
The FT illustrated their front page story with a picture of Corbyn and McDonnell looking militant in front of a deep red background but McDonnell isn’t the first person to have this idea.
In 2016, it was suggested by Civitas, a right-wing think tank with a Tory Lord as a trustee.
Civitas said we should be mindful of the “disadvantages currently being suffered by a generation which has been shut out of ownership partly as a result of the surge in landlord purchasing”.
They continued: “Landlords who bought properties early in the boom years have enjoyed windfall profits far in excess of any normal rate of return they might have expected on their capital, and these gains have been achieved at minimal risk.”
“Meanwhile, many in the generation behind them cannot afford to buy their homes. The policy challenge is to extend a Right to Buy to tenants in the private sector who wish to own their homes while ensuring that
private landlords are not unfairly expropriated.”
According to the FT, McDonnell said that tenants may be able to buy at less than market rates.
Civitas agree with this too. They said the discount should be 35%, as it is for council right to buy, as long as the discount is not so great that the landlord makes a loss.
Civitas’s thinking was later taken up by the London Green Party’s Tom Chance and Samir Jeraj, in an October 2018 report.
They said a private right to buy was a good idea. On the detail, they proposed that tenants should be eligible after three years and the policy could be limited to properties more than 25 years old – so as not to discourage home-building.
Landlords could also be offered discounts on their capital gains tax, Jeraj and Chance said.
Landlords and Tory MPs have opposed extending right to buy. The Landlords Association called the idea “ludicrous”.
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7 Responses to “Even this right-wing think tanks agrees with Labour’s ‘right to buy’ policy”
Dan
In that supposed bastion of the free market, Hong Kong, all land is owned by the state. So yes, it is possible.
Land isn’t supposed be in the market. It makes no sense for it to be, because market forces cannot adjust the supply of land to meet increased demand. The original thinkers on the free market considered using land to earn money as rent seeking.
Gary
The Landlords Assoc is correct, it IS a ludicrous idea. Why would private landlords continue when they could lose their income stream, and at a third below market value at that! It would encourage them to unload their properties, most especially the holders of smaller portfolios.
The initial Right To Buy was a failure because when Councils were forced to sell properties off cheaply, they weren’t allowed to keep the proceeds, this went straight to Thatcher’s Treasury, propping up her failing economic theory until North Sea Oil revenues came on stream and saved her political bacon. Had the money STAYED with councils then new properties could’ve replaced those lost. Obviously only the BEST properties were bought leaving councils with the worst, most dilapidated stock costing more with less money coming in to maintain it.
The answer to this is INVESTMENT. Councils need money to build social housing at genuinely affordable rents, perhaps funding to housing associations too. There’s no way round this. There must be NO right to buy on these properties. We need to learn the lesson from Thatcher’s failure, of you sell housing stock you don’t have it anymore (sounds rather obvious) But the same applies to private landlords too. What that sector needs is both regulation AND enforcement, enforcement with real teeth too! Simply letting people buy their private rent (with a massive discount) won’t help. That house won’t be available for rent again. The family buying a three bed ex private rent won’t need it when the kids fly the nest, renting means they may be more likely to downsize than if they bought it, thus freeing up the property for another young family – something which has been the bane of many young families throughout the years.
Unfortunately these ideas are thought up by people who have never had to negotiate the council house waiting lists nor private renting. The right wing think tanks simply want to see an end to council, in fact ALL, social renting. They take the attitude of ‘why should WE subsidise their housing’ When these private rents are bought, we’ll see exactly the same thing happen as with ex council housing – they’ll be resold on the private market at FULL value and again be unavailable to those who could otherwise have rented it.
Of course, Scotland already ended right to buy some years back and started building council and social housing. Reducing the pressure on the private sector. In my local area the council had previously sub let approx. 45 scatter flats from the private sector for the homeless. These have now been given up as surplus to requirement! These problems CAN be solved. Labour is in danger of making national policy to resolve a London problem, again…