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Labour Right-to-Buy plan would kill off PRS

Sally Walmsley
Written by Sally Walmsley

Labour plans to force landlords to sell homes to tenants for less than market rates would kill off the private rented sector, says the RLA.

Shadow Chancellor John McDonnell has today proposed a new ‘Right-to-Buy’ scheme for private sector tenants to tackle what he describes as the “burgeoning buy-to-let market” and the problem of landlords who do not maintain their properties.

McDonnell said that, should Labour win the next election, the party would bring in legislation allowing tenants to buy their rental home – and not necessarily for the market price.

He told the Financial Times: “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.”

Mass sell-off

David Smith, policy director for the RLA said: “Labour’s proposal would effectively kill off a large part of the private rented sector denying a home to many thousands of people. 

“If there was to be any chance of this becoming law, there would be a mass sell-off of properties in advance.

“The RLA is all in favour of landlords selling to sitting tenants but it must be entirely voluntary. Anything else amounts to a form of compulsory purchase.” 

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Communications Manager for the RLA and award-winning Editor of RPI magazine. With 16 years’ experience writing for regional and national newspapers and magazines she is responsible for producing articles for our Campaigns and News Centre, the weekly E-News newsletter and editorial content for our media partners.

She issues press releases promoting the work of the RLA and its policies and campaigns to the regional and national media and works alongside the marketing team on the association’s social media channels to build support for the RLA and its work.

41 Comments

  • So my wealthy property owning tenants from South Africa who are renting here only until their final visa application is approved would be able to buy my house at a nice discount and sell it on again at a profit? And all at my expense?

  • The proposal by Labour suggesting tenants can force their landlord to sell HIS property to them is an absolute disgrace! The property belongs to the landlord and the tenant is only hiring it from the landlord . Regardless of the fact this is a campaign issue to win votes it amount to little more than the theft of people’s private property with absolutely no consideration for the people who actually OWN THE PROPERTY! Labour really are the pits to even suggest such a scheme and have now sunk to a new low. They have not considered the repercussions to the prs . It’s high time that Governments kept their nose out of our business

  • John McDonald doesn’t like the fact that 30% of the homes in his road are BTL so it’s not in my back yard thanks and where’s my sledgehammer to crack that nut.

  • Where is this info listed Sally? Would like to read it before I make a decision to sell up. I’d never vote for either if the idiots in charge of the conservatives or Labour. Unfortunately, this will probably not stop one if the idiots getting in to power.

    I should probably avoid reading anything on the RLA website these days as at the moment. Every comment I read, just depresses me and makes me mad and makes me want to sell all of our houses.

    We were buying 2 / 3 per year for the last few years, but are now not buying anymore. Good news is that we finally had a holiday this year and are currently planning the next one.

    I’ve just about had enough of the bashings from the government over the last few years. They will get more houses available as people like us just sell up, but most of my tenants tell me that they can not get a mortgage and will probably end up homeless unless other invertors buy our houses, or mortgage lenders are suddenly made to take on people that they know will default, or the government buy them and rent them out again after selling them off in the 1980’s.

    we look at 3 bed semis to let to families with children and rent them out at regular rents in the area, but all are in immaculate condition when rented out.

    Houses have increased in value and now could be a good time to sell and retire. Would feel bad about evicting tenants. But the government onslaught on Landlords is going to make me give up and just retire on the income that we have invested in the houses.

    Due to the new tenant fees ban, we sadly no longer accept pets, we now hold out and only accept the best tenant. We no longer accept Housing benefit. Sorry, but I am no longer taking risks so as the government can benefit from risky tenants.

    • Hi Wayne – At present there has been very little clarity from the Labour Party on the details of what Mr McDonnell is proposing. However, this was a policy proposed by Jeremy Corbyn in 2015 during his Labour leadership campaign.

  • After a lifetime of being a Labour supporter and active party member, I have today resigned my membership because of this Communist policy. Labour has gone too far to the left and it will be their undoing.

    • Thanks for this. I was beginning to wonder if the country was sliding into a parallel universe. Momentum carried out a coup by flooding the Labour Party with extremists who work tirelessly and ruthlessly to suppress dissent from the real members. They now think they are on the brink of doing the same thing to Britain. I hope and pray that they are wrong; or if not, that we still have an electoral system by the time they bring the country to its economic knees, just like their comrades in Venezuela.

  • Without thinking and only for vote bank only labour party can do this type of behaviour. It is totally unacceptable . It is better to go on benefit rather than do hard work , pay more tax and create wealth for retirement .

  • Also speaking as a lifelong Labour voter and now a pensioner who would have voted for them in the forthcoming election, I now will not. My only rental property is the annexe to my own home which I live in, it’s part of the structure and fabric of the same building, which was bought with my future mobility needs in mind – ie for a carer should I eventually lose my sight – as I have cataracts in both eyes & live in a rural area 3 miles from the nearest shop, 12 miles from the nearest town, and there is zero public transport here.

  • If there is a mortgage on the property that is greater than the amount in rent being paid how will this work?

    Mortgage lenders will have to take the loss?
    Mortgage lenders will recall the loan I suspect before they will go that!

    Indeed no mortgage lender will lend for BTL and therefore the market will be dead!

  • Well, this would bankrupt many landlords, some of whom (mostly pensioners) would be thrown onto the state for assistance and in the meantime while this stupid law was passed properties would be (logically) run down. Why waste your money on maintenance? I think that the Labour party had better carry out more detailed research and not do a ‘Cameron ‘ and impose this law on the electorate. Many landlords bend over backwards to maintain their tenants in good accommodation. Labour would be throwing out the baby with the bathwater.

  • So at the moment this is “just an idea” and similar ideas have been proposed in the past. Dont get me wrong, this is bloody moronic and a huge slap in the face for us decent landlords, who do our best to look after our tenants and properties.

    … Have governments not learned from Thatcher selling off the council houses and leaving a huge void in the system?
    There are reasons why people need rental properties and it’s not always about affordability.

  • I worked as an estate agent when the Right-To-Buy came in for public properties. The difference between the tenant buy price and market value was shocking. Many right-to-buy owners were then selling on the first day they were allowed to at a huge profit. Several we worked for then started a property portfolio on the profits. Now the country is short of council rented properties as a result. This proposal would force the sell off of PRS properties leading to another acute rental shortage.

  • I feel there will be a backlash against Labour going so far to the left with Momentum and Jeremy Corbyn that they risk losing their status as a significant opposition party, let alone a party in Government. A lot of Labour members and supporters understand this, it just needs someone to emerge as a strong leader to oppose this. Corbyn cannot win an election in my view, and I am not a Tory. I watch with interest the emergence of a stronger LibDem with a charismatic leader in Jo Swinson. And if Tories head down the extremist right path as currently, more will defect to Jo’s party. It’ll take a huge shift but if anything these changing power blocks will hopefully encourage Labour to come up with less extreme policies to understand that is the only way they will ever regain power. Corbyn is not the man for that.
    The other effect of such an extreme housing policy would be to push more landlords like me into the Airbnb et al sector, especially where tourism is strong. This could have a spin-off in employment too for local people without regular or sufficient income acting as cleaners/key providers/maintenance people etc. Every cloud…

  • We only own a small flat as I had to buy somewhere for my mother to live and it meant we couldn’t afford to move onto a better property ourselves so are still in our first home, when she passed away we rented it out, had great tenants for past 6 years and they’ve signed up for another 3, we already charge them below market value, its in great condition and we intend to save the flat for when our children grow up so they will have a property, it’s outrageous that a party I’ve supported my whole adult life is treating our situation like we are greedy unethical landlords that need to be dealt with! We live in a modest house, we barely make ends meet, the rent just covers the mortgage and costs of the flat, it’s our twins future home once they grow up so how on earth are we depriving anyone of anything! This attitude that all landlords are greedy, rich and evil is just ridiculous, just bring out laws that properly tackle the bad landlords out there instead of tarring us all with the same brush, build more council housing and stop demonising us! It’s not difficult as Mr McDonnel said!

  • It seems as though those of us who have chosen to make something of ourselves and try to create a reliable source of income in our retirement rather than be victim to the quixotic stock market – or indeed a burden on the state – continue to be vilified and punished by politicians of every colour and persuasion.

    It is appalling enough that a Conversative government expect us to behave like a business and comply with numerous pieces of legislation – yet has withdrawn our ability to be taxed like a business. Now Labour plan to rob us in broad daylight and hand the results of our hard work over to people who in many cases had equal opportunity to do what we did but couldn’t be bothered educating themselves and taking those risks.

    It is a sad day when the Monster Raving Looney Party starts to look like the only viable option. I would very much like to exercise my democratic right to vote but in the absence of a MRLP candidate, the only option left to me is to spoil the ballot paper with “NONE OF THE ABOVE”.

  • I am renting my home so Iive with my mother.
    I can’t imagine having to sell to my tenants, there’s no way I’ll ever get on the ladder again, honestly I think I better just evict them on the end on their tenancy and start short 6 month lets?

  • The Labour party is now a communist party dictating to everyone and conning everyone out of their hard earned money. They are an absolute joke. First hint of any Labour involvement in running this country and I will sell up and even considering leaving the country to a more hard working people friendly country. They are a complete joke and embarrassment and a hideous disgrace against the people who died for this country. They should hang their heads in shame. Is it worth being a hard working plan ahead person in this country anymore. No you only get if you demand that the hard workers owes you a living while they pick up the handouts and the giveaways.

  • Communist is exactly the right word – Labour are more Communist than Stalin lately… So are the idiot armchair social workers in my local newspaper, wanting to ‘requisition’ empty properties to give to ‘homeless’ people… I have rented to homeless people, which has helped the Government and my local council to tick off their quotas, and it has left me with a wrecked building, thousands of pounds of arrears and severe threat of repossession. And I’m supposed to be all pity for people who do little but bite the hand that feeds them! Should such a law ever be passed, I will merely torch the entire building, with a large effigy of the Labour party in a prominent burning position!

  • It is absolutely disgraceful what nonsense comes out of senior Labour mouths! The implications of this however are far further reaching than “just” decimating PRS. This is no longer about that. Any government that goes down the route of compromising property rights will destroy the country. Say goodbye to any form of foreign investment and say hello to UK being downgraded by several notches and watch the borrowing costs spiral. Anyone voting for what has become of this party is insane.

  • Whatever next? It sounds ridiculous, if this happens it will be a repeat of Margaret Thatcher’s ‘right to buy’ council houses and there will be no property available for tenants to live in later on. Maybe capital gains tax will be abolished too if we are forced to sell our properties?….I doubt it!

  • I wonder how many sitting in the house of Lord and commons let property? A few I believe, it would be interesting to find out. Another marxist policy from a potential marxist government. When my tenants leave my family home I will sell.

  • For some time now I have seriously been considering my continued involvement in the PRS. With this situation going on in Parliament, I have a bad feeling that Labour will be our next government, which is going to be a grave problem for landlords. Labour would not think twice about trampling landlord’s human rights in favour of tenants. Nobody should be fooled into thinking their policies are intended to look after those who need to rent as it is obvious that they will undoubtedly be the ones who end up hurt by this. Unfortunately, anybody who they perceive to have done well from life will be targeted. I for one will be selling up straight away ……..and leaving the UK.

  • If there is to be a snap election in the next couple of months, section 21 will still be on the statute book. If the result of the election is that Labour win enough to govern (eg with the backing of SNP) and have placed private tenant right to buy in their manifesto, I would expect to see mass evictions of longer term tenants who might otherwise have qualified for RTB. A complete tragedy could be just around the corner.

  • Stupid idea for so many reasons listed above in the comments. BUT it is just an idea and not policy. To prevent it becoming so, Labour members and supports need to write to McDonald expressing their views quickly. It could be the death of PRS and the Labour party as we know it if these crazy ideas are not stopped.

  • Agree with so many views expressed here. I can only add a little to those…I have to look at the money motivations of Govt too, especially as they struggle with the tax coffers. With the ongoing tax assault on the PRS over the past years which is wholly to boost tax revenues, I wonder if the Govt (shadow Govt) strategy includes an element of pushing Landlords to sell off, and crystallise capital gains and therefore CG tax revenues.

  • I’m not sure if the plan would even be legal unless they created the discount from the landlords CGT obligation although I think this already exists in the voluntary system

  • I am selling up, thing are getting worse, I thought this was a free country for one & all
    But apparently not for good private landlords who have put their hard earned money into their properties
    Disgusted with labour, I have not voted labour for quite a few years when the penny dropped to what they were all about, I will not be changing my mind,
    If they think they can run this country (god forbid) they should think again they are all over the place. Labour are do as I say not as I do.

  • For anybody who thinks ‘It couldn’t happen here’ I can only say yes it could. I spent a lot of time in Venezuela in the late 80s and nearly went to live there. Never never ever in my wildest dreams could I have imagined it would end up in the state it is now., nor did anybody else at the time. That what socialism does for you.

    The Labour policy amounts to the confiscation of private property (used in its most generic usage not just housing), ownership of which which is one of the basic tenets of a free market economy . Expect to see a few legal cases about this should it fly.

    We will be selling up and leaving the country if we get a Labour government, if we can get our money out – expect to see currency controls very quickly as money will pour out of the UK and there will be a run on sterling.

  • McDonnel was on the Andrew Mar show this morning and he was very briefly questioned about this policy proposal. In particular Mar asked him what price the tenant would pay. His response was “it is a sensible policy idea, nobody will lose out, the price will be fair”
    To calm my fears all he had to do was say ‘market value’ – he very pointedly avoided saying that.

    Despite some negatives, the strength and bouyancy of the housing market currently underpins our whole economic strength and security. If a huge swathe of housing comes onto the market all at the same time (as landlords seek to jump before legislation) this would have a very serious effect on house prices and thus the economy in general.

    We are potentially heading for a perfect storm, put into a position where you can’t evict your tenants but they can buy the house for a nice fat discount. No way out for the ordinary decent landlord 🙁

  • The best properties would be sold off to tenants who have perhaps only lived in a property for a short while, leaving the dregs of the market available for those needing to rent, this will push rents up due to high demand for less properties, where will all the people who have low or no incomes live? Labour have not thought this through!

  • The guy is a bafoon. . Obviously not thought this through at all. He is grabbing headlines to see the reaction. It’s really not worthy of further discussion until he has been elected which the way he is going won’t be any time soon

  • The threat of our first ever communist government is all too real, because Labour created a benefit-dependent society during its 13 years of misrule from 1997 to 2010. These people now believe in rights, not duties. And they will love to watch as your hard-earned wealth is divided among them.
    All the whining in the world will achieve nothing, once McDonnell has the keys to no. 11. The only way to stop this is to act NOW and ensure Labour does not get enough votes to gang up with the other minority parties and form a coalition in which they will rule the roost.
    Labour isn’t Labour any more. And it’s sad that some decent Labour MPs would apparently rather shelve their own beliefs and principles, and keep Corbyn and his left wing loony pals, in order to get into power – rather than doing the honest thing and throwing them out.
    The ONLY solution is to hold your nose and vote Conservative. A vote for ANYONE else is a vote for Corbyn. Bad as they are, the Tories’ ineptitude and landlord bashing are NOTHING compared to the utter destruction of this country which will take place under Corbyn.

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