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Labour needs to re-think its sequestration proposals
By LandlordZONE -6th September 2019
Right-to-buy was a main plank in the Thatcher era property owning democracy drive, when the Conservatives introduced laws to allow council tenants to buy their homes at discounted prices.
David Alexander, MD of DJ Alexander, Letting and Estate Agents in Edinburgh and Glasgow, says, perhaps what’s good for the goose, is good for the gander? Why shouldn’t the shadow Chancellor of the Exchequer John McDonnell propose applying the same medicine to private landlords’ properties?
Mr McDonnell of course has suggested it may become Labour policy to give private tenants the right to buy their rented properties’ at discounted prices.
“A compulsory ‘right to buy’ in the private rented sector is just plain loopy,” says Mr Alexander, writing for The Scotsman newspaper. “Descend from planet Zog to planet earth and it becomes clear the consequences would not only destroy confidence in the housing market as a whole but create havoc in the national economy by trip-starting a massive flight of capital from the UK,” he says.
In all seriousness Mr McDonnell reiterated the idea following a wider report Where We Stand: Housing for the Many in an interview last weekend.
But there’s a big difference between the government selling off council houses at below market value when council homes are public property, and applying the same logic to private property. The council house building initiative was a massive Second World War building programme funded by central, not local government, continuing up until the 1970s, so a Westminster inspired sell off was perfectly logical argues Mr Alexander.
On the other hand the effective sequestration of private property goes against every tenet of a free democratic society: over a thousand years of English common law, the British Constitution built on individual rights set-out variously in Magna Carta 1215, the Petition of Right 1628, and the 1689 Bill of Rights, also known as the English Bill of Rights, not to mention the United Nations Declaration of Human Rights of 1948 and the European Convention on Human Rights of 1950.
It has long been argued that relative prosperity in the West is a direct result of the rights conveyed in these principles; not so of course in communist countries, largely of the east, where collective ownership, not private ownership of real property was a fundamental part of the Marxist theory and philosophy.
Mr Alexander says:
“Look around the globe: countries where the law respects property rights have free and fair elections, freedom of speech and consumer choice; those who do not tend to be authoritarian and struggle economically.
“Requiring landlords to offload their own private assets (especially at below-market rates) is totally different. It also seems ironic given that most private landlords have managed to buy into the market through taxed income amassed by their own efforts rather than inherited wealth; indeed it is probably fair to say that many of them were brought up in Labour-voting households.
“So while a compulsory “right to buy” in the private rented sector is wrong in principle, in practical terms it is just plain loopy. According to the shadow chancellor, the outcome would be improved quality as too many landlords spend too little money on their properties to make a “fast buck”. “In my street now… a third of the houses are right-to-buy, badly maintained, overcrowded; it’s horrendous,” says Mr Alexander.
“If there is concern about safety and overcrowding in privately-rented homes then affected tenants would be better served by a future home secretary making sure the full force of the law is brought down on “rogue” landlords rather than penalising responsible owners.
“But if a law giving tenants the right to buy is ever foisted on the private sector there will be few responsible landlords left because most will have sold up before a compulsory sales regime further diminishes their properties’ value. Where will that leave Labour voters for whom renting privately is essential because they can’t raise the deposit on a mortgage?” askes Mr Alexander.
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