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TODAY'S OTHER NEWS

Labour’s private tenants ‘right to buy’ policy is a ‘cash grab’ from the PRS

The Labour Party’s proposed ‘right to buy’ policy would have a devasting impact on the private rented sector and lead to a surge in homelessness, according to a major property management firm. 

Apropos by DJ Alexander fears that Labour’s proposed scheme, under plans unveiled by the shadow chancellor John McDonnell, could drive many landlords out of the market. 

In an interview with the Financial Times, McDonnell stated: “You’d want to establish what is a reasonable price, you can establish that and then that becomes the right to buy. 

“You (the government) set the criteria. I don’t think it’s complicated.”

McDonnell said the plan would be a way of redressing problems such as landlords refusing to invest in their properties while making a “fast buck” at the cost of their tenants and the community.

“We’ve got a large number of landlords who are not maintaining these properties and are causing overcrowding and [other] problems,” he added.

Apropos by DJ Alexander believes that Labour’s suggestion that private landlords should be selling their properties to their tenants at a below market rate arbitrarily set by politicians would have an adverse impact on the housing market. 

David Alexander, joint managing director of Apropos by DJ Alexander, commented: “This is effectively a cash grab from the PRS. The state valuing private property and effectively compulsorily purchasing it would cause the PRS market to collapse and have an enormously negative impact on the housing market as a whole as individuals and investors would lose faith in the viability of property.”

“Lenders would be unlikely to provide loans to fund the purchase of these properties as values would be in freefall. Why would anyone invest in property either as a landlord or as an individual if the value of the sale price could be anything the government wished to pay and, in the case of individual homeowners, if any gains above £125,000 are to be taxed at the highest rate of income tax.”

With the UK population forecast to increase by 360,000 a year for the next decade there is already a shortage of homes and destroying the PRS because of “ill-considered ideology” would only increase the numbers of those without a home, according to Alexander. 

He added: “The PRS already provides 4.5 million households in the UK accounting for 20% of the total housing market The Labour party would need to commit to building millions of social housing homes in the first couple of years to replace this market and keep up with the increasing demand.

“Mr McDonnell also said that the PRS has a greater problem with overcrowding when, in fact, the social housing sector recorded its highest ever figure of 7.8% of all stock experienced overcrowding in 2017-18.”

Alexander continued: “This proposal hits at one of the fundamental tenets of society in the UK that people want to own property and be sure that the value of their investment and hard work is not going to undermine at the whim of government policy. 

“This right to buy scheme would permanently undermine the confidence of individuals and investors in property and cause serious and substantial financial losses for millions of homeowners across the UK.”

Poll: Do you think Labour’s private tenants ‘right to buy’ policy would destroy the PRS?

PLACE YOUR VOTE BELOW

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    How the hell have we reached this point?

    Brexit may lead to a Corbyn-led government sneaking in through the back door and that will have terrifying consequences.

    Total disaster, these people are communists and this is a communist policy. A free country is not supposed to function like this.

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    the eu is also communist/fascist--theres really little difference

     
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    Yes, Terry That's why Corbyn and his cronies want to remain in cahoots with them.
    Stuff about half of Labour followers who voted for Brexit.
    The Labour exec are determined to impose their Communist policies and are using the electorate to get them to that position.

     
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    I can’t believe what I am reading I’ve worked hard took risks provide a valuable service and he thinks he can take it I cannot see in any sane world how this could be allowed to happen think it’s just a vote winning soundbite from a loon

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    Be afraid, be very very afraid!!!

     
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    incompetent opposition to such changes

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    We have been discussing this all morning and have come to the conclusion that in the event of "no deal" being taken off the table, Boris will call an election, do a deal with Farage and the election will be between Brexit and remain, remain having 2 parties, Labour and Liberal. Therefore Corbyn will never run the country and this poilcy is irrelevant. That said, if he somehow gets in, I'm emigrating!

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    Conservatives must make a deal with the Brexit party, otherwise, we could end up with Farage taking just enough votes away from Johnson to hand power to Corbyn (lib dems and the other left wing loonies will make a deal with the communist to stop brexit).

    I'm definitely emigrating or going on the dole if Corbyn gets into power.

     
    Paul Barrett

    It would be very difficult to emigrate as overnight McDonnell would introduce EXCHANGE CONTROLS!
    You need to get your resources out of the UK well before a potential Labour Govt takes office.
    Easy to say not so easy to do.
    Personally I haven't a clue how anyone would go about this.
    But it might be worthwhile selling up now and investing in gold coins which you then bury.
    Probably to be dug up 1000 years from now like occurs now with detectorists.
    Gold will always retain its value even a thousand years from now!

     
    Daniela Provvedi

    @Duncan Foster & @Dani Simmons - emigrate? Where to? The EU? If the UK crashes out with no deal, then the EU wouldn't want you. The same way as you don't want them... 🤣🤣

     
    Daniela Provvedi

     
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    Daniela Powell, I don't care anymore whether we leave or remain. For me, Corbyn is more dangerous than anything. I would rather leave the EU if it means no Corbyn. I'd rather remain in the EU if that would hamper Corbyn's chances. Whatever prevents this appalling communist, tyranny loving arsehole from going anywhere near 10 Downing street.

     
  • Suzanne Morgan

    The Right To Buy of a tenant in a privately owned property would never happen in my view. A vast number of properties will be mortgaged and there for still have a Charge owing to the Lender. No sane landlord would let out a property with the prospect of it being under threat of compulsory purchase the minute someone has the keys. There would be mass evictions I would think. Legally, unless the law were ever changed, the owner is under no obligation to sell to ANYONE. I am however not against selling to a tenant at market value if that was in a mutual agreement.

  • Paul Barrett

    An even better idea would be to sell to the Govt at full market value.
    I'd gladly sell my properties to the Govt who can then use them as Social housing.
    Not sure my current neighbours would be very impressed by that....................living next to HB tenants!!
    Me I won't care.
    Govt forced me out of business with their dopey policies especially S24.
    I can't wait to get out of the AST PRS anyway,
    It would be a great way to use the proverbial money tree resources to buy up 2 million properties for social housing.
    Instantly reduce the HB bill and leave the next couple of generations to pay for it all.
    After all it will take at least 100 years to pay off all the bank bail out money along with ALL the QE debt.
    While there are those who are prepared to lend to the UK then increasing the National Debt to buy back the 'family silver' might be a sensible move.
    I'm all for a much reduced PRS and would prefer that all HB tenants were in social housing.
    LL could really do to have nothing More to do with DSS tenants.
    They WON'T be missed at all.
    Then hopefully the remaining tenants will be of a quality that they all qualify for RGI thereby protecting a LL from their tenants should things go awry!

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    I think Labour have possibly overplayed their hand on this one. Anyone halfway sensible would ask why should we hand over something that we saved up for, went without & risked all for them to steal our pension.

    "Land of the many" from the politics of envy eh.

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    Great idea lets all sell all our properties to the government. They paid Market price for HS2 clearance of properties. Please buy all of mine. At least i my recoup some of the £3m i lost on paper value when the 2007/8 crunch came about.

    Paul Barrett

    I believe that Govt would be most surprised if they offered to buy LL properties at full current market value.
    They would be overwhelmed by LL clamouring to sell to Govt.
    Throwing money at the social housing problem by buying up private property for conversion to social housing would to a major extent immediately solve the social housing shortage.
    Far better to buy up private property than waste it on HS2.

     
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    But how many tenants would be able to find enough money for the deposit, how many would be accepted for a mortgage, how many of our properties would pass a mortgage survey, most of mine would not I bought properties at auction many having suffered structural movement. No I don't think this will happen, just a lot of hot air to get the GR vote.

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    Im sure McDonnald will instruct/force the mortgage companies to do 105% loans at special rates to these people subsidised by our existing loans that will have been forced up again encouraging us to sell.

    Land of the many from the politics of envy

  • Paul Barrett

    Well it certainly looks like we shall all find our fates very soon.
    I was hoping for the security of the FTPA to give me time to exit the PRS.
    It seems my hopes of this being the case are to be dashed.
    We now have a very peculiar situation where the Govt of the day wants to call a GE but the opposition won't allow it!!!!!!!!!
    Obviously the opposition is trying to achieve cancellation of any No Deal BrExit which is scandalous.
    But once this is achieved then they will vote for a GE.
    What happens then nobody knows!?
    But the risk of Labour being in control is too frightening to contemplate.
    I was hoping to get out of the PRS with at least something.
    It looks like all I will be getting is a Statutory Demand for my Bankruptcy!!!
    This will occur with many other LL.
    There will be a major property price crash if Labour get in.
    It won't only be LL that are financially destroyed!

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    People have forgotten what a Labour government is capable of. It feeds on the politics of envy. Many of us have been channelled into being private landlords because we find ourselves without adequate pensions - and whose fault is it that so many schemes have been raided?? Also marital breakups etc have fuelled the need to provide income for oneself in later years. Anyone with half a brain should see that it is total madness to vote Labour at present. Labour would bankrupt this country and remove the incentive to help oneself. Brexit may be a handy tool with which to aquire power - so beware. Let's hope Labour implodes due to it's own internal tensions and squabbles. The best bet for long-term stability I think is a sensible middle ground party that just sorts Brexit - Stay or Go (without a deal if that's what the majority want) and GET ON WITH IT. Britain will be OK longer term because we have a resiliant people who want to be left to get on with life for themselves, their families and their communities. Politicians have shamefully failed them.

  • Paul Barrett

    It seems that being an AST LL is not a very wise business strategy for the future.
    The majority of the MORTGAGED PRS is based on AST lettings.
    With the prospect of a Labour Govt enforcing a RTB strategy it would be crazy to remain an AST lettings LL.
    Those with BTL mortgages need to try and convert them to residential so that LODGERS may be taken on or convert to FHL mortgages etc.
    But remaining an AST LL is no longer viable with the threat of Labour.
    Those without mortgages have far more flexibility to get rid of tenants and have other lettings strategies.
    But for those LL trapped with normal BTL mortgages they may have little alternative than to sell.
    They simply cannot afford to have tenants with the risk of RTB.
    It also makes no sense for the future any LL investing in anymore AST lettings for newly purchased properties.
    Indeed it makes much more sense to consolidate and sell off as many AST letting properties as possible and reduce leverage on the remaining ones where resi mortgage might be possible.
    These Labour RTB proposals have turned the conventional BTL model on its head.
    It makes no economic sense now to be an AST LL!!!

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    I think you are going a little over the top if I’m honest there will always be ways round these loony politicians all these announcements are vote grabbing sound bites and tbf I cannot see these extreme left wing communist policies getting through parliament. The Labour Party is as broken as the Tory party we are in the midst of political change like no other in our life time. S24 was horrific but I have navigated it and anything else these absolute idiots throw at me I’m ready bring it on.

  • Paul Barrett

    I admire your confidence that RTB would never come to pass.
    Would you have ever imagined mortgaged sole trader LL being taxed on turnover!?
    I simply don't have the confidence you have.
    If the idiot Tories have introduced S24 it is no stretch to see Labour introduce RTB.
    I intend to sell all my properties mostly because of S24 but with the now added incentive that by selling up I won't be vulnerable to RTB which would bankrupt me.
    I don't have the investment timeline available to take such risks.
    The RTB threat is the straw that has broken this particular camel's back!!!
    I simply cannot afford the risk of RTB so must leave the AST lettings market.
    I would suggest that lenders are currently having kittens!!!
    This RTB proposal could devastate the banking industry.

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    I have a big beast so it’s not that easy but have two up for sale now any come empty with decent equity I am selling tbf to hedge my bets because you are right who knows what these loons will do next

    Paul Barrett

    I think it says something when longstanding LL such as yourself are actively selling.
    Doing such is a far more accurate reflection of LL sentiments than any number of stupid surveys which a seem to suggest that the PRS is in rude health with no sign of a slowdown in additional investment activity.
    I just be on a different planet as I don't see it at all!!
    More like you LL are selling off.

     
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    I put two houses to let few weeks ago in Manchester I had 58 calls in 8 hours of the advert for the two begging me offering me more money etc. The same story kept coming ...... my landlord is selling we are desperate. What the government has done to these poor people is a scandal. I now do annual rent increases because of this government something I have never done in 16 years before all these costs keep getting loaded on to me.i will also sell a good proportion of my houses and buy somewhere in the sun and get the hell out of this wretched country. Work hard be legit and u get ur pants pulled down in this country and I for one have had enough .

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    Right to buy has caused the current lack of Council houses so its fiscally naïve to try and enforce it on the private sector.
    I believe this is just a flag waving exercise as there are no facts (specifically to define what is a "fair price").
    That said all my contract renewals will have a specific clause where the tenant formally gives up any right to buy that may come to pass. Then I have something to use to challenge in the courts.

    Paul Barrett

    I can't believe that such a simple device as you suggest to defeat any tenant RTB would work.
    To me having unrelated sharers on one AST would defeat any RTB.
    Single households are where the RTB risk is.
    But then you still have rent controls so still not worth letting on AST.

    Owning multiple residential homes and taking in lodgers at each of them won't be subject to rent controls.
    What a live-in LL does is their business and not even a Labour Govt would expropriate private residential property no matter how many owned and occupied by lodgers.
    I know if I had a large portfolio I would just sell up and convert to remaining residential mortgages etc.
    I would then live in each one at least 1 day every tax year.
    Then NO RTB or Rent control risk.
    Yes it means kitting out multiple residences as your home but no real hardship in the overall scheme of things.
    No more tax for a start on income as each one qualifies for RFR if stated in once every tax year.
    Got to think out of the conventional box to defeat the Labour nutters.

    Surely all a looney Labour Govt would declare such clauses as null and void!?

     
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    It would at give something to defend in court. A tenant signing away their in a specific contract v a general government policy. Without it, theoretically a government can put this policy in and you would have little redress.

    Paul Barrett

    Not sure such a clause would work.
    Just considdr how Compulsory Purchase works.
    It would not be too much of a stretch to appky this to private rental properties.
    I really don't see anyway that a LL could prevent expropriation apart from having multiple unrelated sharers on one AST.
    It would be pretty much impossible for such domestic rental setups to exercise a RTB.
    In actual fact havibg no more than 4 unrelated sharers could be an effective business strategy in that not all of the tenants would default on rent.
    A LL would have to waive the joint and several rent luability though.
    I have this with a rent defaulting lodger.
    But am receiving the rent share from the other two.
    So a change from single households would seem to be very risky as far as RTB is concerned.
    I won't be taking on any new single households anymore.

     
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    For many multiple sharers isn't an option or desired. Given legislation isn't passed, and generally that a specific contract between two parties will overrule a general policy, its a precaution worth taking and relatively easy to do.

     
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    There will be corruption galore with this government policy.

    Same as there was with the council house right to buy. Unscrupulous landlords will target vulnerable cash-strapped tenants, help them buy from the landlord at the discount and then agree to rent to them as before. Same thing happened with council housing.

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    John McDonald dont know what he’s talking about & don’t have to, it’s not his property but should know that his fellow party member John Prescott caused all the over crowding we the 2004 Act, taking away LL rights & excluding him from the property, leaving Tenants in complete control of the let / sub-let

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