Labour’s Shadow Chancellor, who earlier this month told a newspaper that he wanted to introduce a Right To Buy policy for private rental tenants even if landlords did not want to sell, has made no reference to the idea in his key speech to his party conference.
Some weeks ago McDonnell told the Financial Times he would like to see private tenants receiving a discount; while he told the BBC that his party would ensure there was a “fair price assessment” of any buy to let property which a tenant may want to purchase. "I don't expect anyone to lose out” the Shadow Chancellor said at the time.
However, in a far reaching speech to his party conference yesterday - covering health, social care, civil liberties, environmental issues and social security - McDonnell made no reference to his Right To Buy proposal.
McDonnell did speak in general terms of introducing rent caps but steered clear of the more controversial Right To Buy initiative.
He pledged that Labour would introduce a four day working week, end all in-work poverty, create a National Care Service, restore trade union rights of the kind that existed prior to the Thatcher government in the late 1970s, and announced a study on how to produce what he called “Universal Basic Services.”
But his only reference to housing of any kind was a board commitment to build a million homes over the course of the first term of a future Labour government.
The Times newspaper has calculated that McDonnell’s proposal - if it is still a possible policy - could cost Britain’s 2.6m landlords £50 billion in lost income and appreciation, depending on the conditions applied to the policy by a Jeremy Corbyn-led government. The newspaper says this would be an average of £18,400 lost to landlords.
The Centre for Policy Studies says: "The big story of the housing market in recent years has been a surge in private rental at the expense of owner-occupation. It is vitally important to reverse that - for example by incentivising landlords to sell to tenants through CGT reliefs for both.
"But it is equally vital that this is done in a way that is fair - to tenant and landlord alike. Labour's proposed 'right to buy' for private tenants appears in effect, to be the expropriation of private property, and is likely to have all kinds of unintended consequences.”
In reaction to McDonnell’s broad pledge about rent caps, the chief executive of ARLA - David Cox - says: “Rent controls do not work; it hits hardest those it’s designed to help the most. The last time rent controls existed in this country, the private rented sector shrunk to the lowest levels ever recorded.
“At a time of demand for PRS homes massively outstripping supply, rent controls will cause the sector to shrink. In turn, this means professional landlords will only take the very best tenants, and the vulnerable and low-income people that rent controls are designed to help, will be forced into the hands of rogue and criminal operators, who may exploit them.”