A leading PropTech chief says there is nothing inherently wrong with private tenants being given the right to buy their property, so long as both sides of the transaction benefit.
Labour is this week debating the controversial right to buy idea proposed recently by Shadow Chancellor John McDonnell.
Earlier this month the Financial Times broke the story of McDonnell’s surprise attack on buy to let. Then he told the newspaper how he would set about allowing tenants to buy their landlord’s property.
“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.”
Landlords failed to reinvest in properties and had made a “fast buck” at the cost of the community and their tenants, McDonnell argued.
“We’ve got a large number of landlords who are not maintaining these properties and are causing overcrowding and these problems. In my street now, a third of the houses are right-to-buy, badly maintained, overcrowded; it’s horrendous” he insisted.
Now leading PropTech figure Neil Cobbold - chief operating office of lettings payment automation provider PayProp - says it must be remembered that the suggestion is not yet official Labour partly policy and needs full debate to tease out specifics which have so far been lacking.
“There is nothing wrong with giving private tenants the option to purchase properties from landlords, but any such system must provide benefits for both parties” says Cobbold.
“Private landlords have been hit with a range of tax changes in recent years, including additional stamp duty and the removal of buy to let mortgage interest tax relief. If landlords were offered some sort of exemption from these measures in exchange for selling their properties to tenants, this could create a scenario that is fair for both sides of the transaction and benefits the overall health of the UK property market” he says.
McDonnell’s proposal has been widely criticised by many organisations in the lettings industry; the Labour Party conference, currently being held in Brighton, is scheduled to hear a speech from the Shadow Chancellor tomorrow.