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The Labour Party has announced radical plans to give private tenants the right to buy their buy to let property from their landlord.
In an announcement that will bring a dark cloud over the UK buy to let sector, shadow chancellor John McDonnell has said that Labour wants to give private tenants the right to buy the home they live in while tackling the ‘burgeoning buy to let market’.
He said that the Labour Party wants to target landlords who let their properties fall into disrepair at the expense of their tenants and the community.
Worryingly, he also indicated in the interview with the Financial Times that the price the tenants would have to pay would not necessarily be the market price.
The shadow chancellor said: ‘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.’
This latest announcement by Labour will further worry buy to let investors, and Mr McDonnell also said that the UK’s 2.6 million private landlords will also face higher taxes if the party was to come power.
The Labour ‘right to buy’ scheme would echo Margaret Thatcher’s housing policy in the 1980s, which allowed millions of council tenants to buy the property they lived in off the government at a large discount.
However, on this occasion it would be hardworking private buy to let investors who would lose out.
Critics of the right to buy plan say the move could cause chaos in the private rental market, leading to a collapse in housebuilding. But a spokesman for the shadow chancellor said it was part of a ‘programme to really end austerity, eliminate in-work poverty and drive up living standards across the UK economy’.
In a further raid on private enterprise, Mr McDonnell also revealed Labour’s plans for a share transferal proposal, under which the government would confiscate £300 billion of shares in 7,000 large companies and give them to the workers.
If it went ahead, the scheme would be one of the largest ever raids by a government on the private sector in Western democracy.