In 2015, Dan Wilson-Craw of Generation Rent used these pages to present a modest proposal: a new right for tenants in the private rental sector to buy their homes. Right To Buy had boosted home ownership and won the Tories the votes of gratefully homeowners before, he noted – why not again?
I published this article with tongue firmly in cheek, fully aware that no Tory government is ever going to trash private property rights in this way. But shadow chancellor John McDonnell is not a Tory, and he’s quite up for it. From the Financial Times:
Mr McDonnell said he wanted to “tackle the burgeoning buy-to-let market” to make it easier for workers to buy the homes they live in. He suggested the sum paid by tenants would not necessarily be the market price. “You’d want to establish what is a reasonable price, you can establish that and then that becomes the right to buy,” he said. “You (the government) set the criteria. I don’t think it’s complicated.”
If this actually became policy it would, I’m sure, have some slightly uncomfortable consequences. The government does not generally interfere with property rights except in extreme circumstances, like a big war. At risk of saying something sympathetic towards landlords, for many of them, their Buy To Let serves as a sort of pension: unwinding that without due care and attention could cause problems elsewhere that the state may come to regret.
And it’s not clear exactly what “a reasonable price” means. The original Right To Buy involved huge discounts. Could the government really force people to sell stuff at below market value?
All that said, I’m not buying the hysteria coming from a lot of the people on the right who are even now attacking McDonnell over this. All the criticisms I listed above seem to me to apply equally to the original Right To Buy, in which national government forced local councils – entirely different legal entities, answerable to a different group of people – to sell their assets at a discount and then nicked the takings.
That, too, is an attack on property rights, unless you consider every bit of the British government to be a single institution which it isn’t, and it undermined the finances of those councils. What’s more, the Cameron-era extension of Right To Buy to housing association properties went even further, by forcing organisations that weren’t even part of government – private organisations! – to sell properties to their tenants.
So, all in all, it is extremely unclear to me how you can support the existing Right To Buy schemes but object to McDonnell’s proposals without being quite ludicrously inconsistent. Not that this, in the age of Boris Johnson, is likely to stop anyone.
There is one thing that makes me feel warmly towards McDonnell’s plan, despite my nervousness: it’s that the rentier class absolutely hate it. This morning the Residential Landlords Association put out a press release warning that the policy would result in a “mass sell-off of properties”, as if reducing the number of homes owned by landlords wasn’t literally the entire point of the exercise. Persuading landlords to sell, after all, will free up more homes for owner occupiers: it’s not like they’re going to demolish the things in a fit of pique, is it?
The press release in question was headlined,
“Labour’s Right to Buy Plans Would Kill Off Private Rented Sector”
To which the obvious response is: “Right. But would it have any negative consequences?”