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9:01 AM, 5th September 2019, About 5 years ago 45
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The think tank Centre for Policy Studies (CPS) has written an article for release describing Labour’s private sector ‘Right to Buy’ policy as dangerous and damaging.
This is superficially similar to a scheme proposed by the Centre for Policy Studies in October 2018, but is a damaging and distorted version of that policy.
‘From Rent to Own’, authored by Alex Morton, Head of Policy at the CPS (and formerly responsible for housing and planning in the No 10 Policy Unit), argued that landlords should be incentivised to sell to tenants, to redress the rise in buy-to-let and fall in owner-occupation in recent decades.
Commenting on the story, Robert Colvile, Director of the Centre for Policy Studies, said:
“It is gratifying that Labour appear to have been reading the Centre for Policy Studies’ recent work setting out a way to help renters buy their home, but they seem to have completely missed the point.
“The big story of the housing market in recent years has been a surge in private rental at 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 (a policy which our research has shown is practical, affordable and highly popular).
“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.”
“From Rent to Own’ proposed that the Government should turn the Capital Gains Tax payable by a landlord on sale of a rented home into a rebate shared between landlord and tenant creating an incentive for the former to sell, and giving the latter a significant contribution towards a deposit.
“This scheme, entitled Help to Own, would mean that for every £1 a tenant invested to buy the property they rent they would receive a total of £3 for their deposit.”
‘From Rent to Own’ Proposal by the CPS:
A fully costed policy which would actually raise substantial sums of money for the government while increasing the rate of home ownership substantially.
The report proposes that for a single year, the Government should turn the Capital Gains Tax payable by a landlord on sale of a rented home into a rebate shared between landlord and tenant – to the former as an incentive to sell, and the latter to contribute towards a 10% deposit so that they can purchase the home.
In order to ensure fairness, the tenant would have to contribute 3.33% of the value of the property to the deposit, although they would be given time to save or find this money. This would be a hand up on to the housing ladder, not a handout for nothing.
This scheme, entitled Help to Own, would mean that for every £1 a tenant invested to buy the property they rent they would receive a total of £3 for their deposit. For an average property worth £228,000, they would be putting in just over £7,000 and getting £22,800 back.
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Karen Holtge
10:30 AM, 14th September 2019, About 5 years ago
Reply to the comment left by Dylan Morris at 14/09/2019 - 10:22
Excellent point.. This will introduce more instability into the financial system again. They are in effect granting mortgages to borrowers who cannot afford them. A better level of security for the banks is an investor who has accumulated deposits/other assets to tide through the ups and downs of the economic cycle as opposed to someone who can only purchase based on a 100% or near 100% loan and the purchase price slashed. 2008 must now be a distant memory to the policy makers.
Karen Holtge
10:32 AM, 14th September 2019, About 5 years ago
Reply to the comment left by Michael Barnes at 06/09/2019 - 23:29
Only if cross collaterialised.... unless they also override the terms of the mortgage agreements.
Kathy Evans
13:24 PM, 14th September 2019, About 5 years ago
Reply to the comment left by michael fickling at 06/09/2019 - 19:41
And if it wasn't wrong to take away someone's property, why is just directed as landlords? Surely Labour should be taking all privately-owned homes and giving them to the local councils to rent out. Especially those where the mortgage has been paid off as the rent would be giving the council extra money - oh, wait, the rents would have to be paid by the "taxpayer" (any of them left?) as the retired people with paid off mortgages wouldn't be able to afford it without housing benefit. So let's just redistribute the big houses (like Corbyn's) and house two or three families in them. I wonder why there's no mention of forcing unemployed people to work - I though it was supposed to be "from each according to his ability; to each according to his need", so don't try and tell me that these unemployed people aren't even able to sweep a street or pick litter or load a wagon. Would save a mint in benefits (not that it matters as "the state" would be paying either way) . These Corbynistas need to re-read their Marx and Lenin (and Trotsky) - you can't have socialism in one country, it has to be international, or you get USSR or Venezuela.
Dylan Morris
18:47 PM, 14th September 2019, About 5 years ago
Right To Buy as introduced by Thatcher in the early 1980’s (and vehemently opposed by Labour) and still operating now, was all about tenants in social housing purchasing their Council home. It was primarily designed to improve Council estates by giving residents a stake in their home and pride which would uplift the quality of the area. In many cases it did just this. Should this Labour communist idea ever see fruition then the position will be very very different. We would be looking at tenants in private housing, some in expensive properties in very desirable areas, purchasing not social housing to give social tenants a stake, but for the sole purpose of transferring wealth from landlord to tenant. Lenin and Marx would be very proud of their student McDonnell.
Laura Delow
14:56 PM, 15th September 2019, About 5 years ago
A number of ex council R2B properties bought were i) bought at a massive discount then on the QT let out soon after & then they often bought another property elsewhere in another family member's name on a buy to let basis (at 85% loan to value back then which is creeping that way now) or moved in with boy/girlfriend or family elsewhere or ii) after e.g. 3 years they Let to Buy. In either case these council tenants became the next wave of new landlords (fueled by greed they accuse the landlord community of) or iii) after 3 years they sold it often to an investment purchaser (as not always desirable properties for FTB's who either wanted new build or properties with more character or just simply liked renting & didn't want to buy nor take on responsibility of ownership & high service charges which ex council flats often come with). I know this for a fact as I am a mortgage broker albeit now semi retired & dealt with a number of these clients back then & lost much business as a result of telling them they weren't allowed to buy & rent it out & I was obliged to report this if I knew this to be their intent. I also had a number of council tenants' adult children remortgaging their main residence to raise the funds to fund the purchase for a parent on the basis it was a good long term investment even though they had to wait until their mum or dad eventually died to benefit from it. These children are now part of the landlord community their parent having long since died). Lastly, even though the purchase price was heavily discounted, a number of these council tenants wanted a self certification mortgage, often inflating their incomes in order to obtain the necessary mortgage amount. It just created mass mortgage fraud. I hasten to add these clients also went elsewhere to get their mortgage as I challenged their incomes.
End product; abuse of the R2B process, less property to rent for the next generation, created a property boom, made people greedy for the wrong reasons, ex council tenants are now landlords & moaning about being accused of being greedy, and it created shed loads of mortgage fraud. I know a large number of brokers who eventually got found out & done for this.
Appalled Landlord
23:17 PM, 23rd September 2019, About 5 years ago
Paul Johnson of the Institute for Fiscal Studies gave a warning about interfering with private property rights on today’s Politics Live programme.
He outlined the effects of proposals that were in McDonnell’s speech, then he brought up other policies that had been talked about, including “the potential for renters to buy houses from landlords at below market value” He said “You have to be very careful at that point where you are clear about rights to private property because if you lose an absolute legal clarity about rights to private property then you really really risk particularly international investment on which this country is actually peculiarly dependent.”
About 58 minutes in https://www.bbc.co.uk/iplayer/episode/m0008rss/politics-live-23092019-labour-party-conference
Dr Rosalind Beck
23:34 PM, 23rd September 2019, About 5 years ago
Also in a good interview - for a change - by Emily Maitlis on Newsnight with Keir Starmer this evening, she referred to a text by an unspecified Labour MP to the journalist Kevin Schofield, saying:
'We look like a chaotic, scruffy, angry, deluded, dangerous rabble. We hate success, hard work, intelligence and wealth. We like mediocrity, laziness, irresponsibility. We're chanting the name of our leader like a cult. Why would anyone vote Labour?'
She also questioned him on the issue of 'asset-stripping' (aka theft).
Appalled Landlord
1:28 AM, 24th September 2019, About 5 years ago
Reply to the comment left by Dr Rosalind Beck at 23/09/2019 - 23:34
Thanks Ros
I had deliberately missed that with the fast forward button, having been bored to tears listening to him over what seems like an eternity.
Why was he knighted? He pretends to hate it. “He told the Ham & High, a local newspaper in his constituency that "I've never liked titles" stating that "When I was DPP, everyone called me director and I said, 'Please don't call me director, call me Keir Starmer.' It's a very similar battle now."[35].
https://en.wikipedia.org/wiki/Keir_Starmer
I don’t remember seeing him on the news being restrained in his best suit while a member of the Royal Family forcibly dubbed him Sir Keir. He could have turned it down of course - but he took one for the team.
The text from the Labour MP is a cracker. They should set it to music and sing it at the end of conference instead of that nonsense about a flag being soaked in workers’ blood.
I also liked the bit where the hapless chair person declared the result of a vote on a show of hands. “I thought it was one way but Jennie said something else, so..…Yes that was lost“ She was referring to Jennie Formby, the mother of Len “Adonis” McCluskey’s illegitimate child. Then the chair person said it was carried, and was promptly corrected by a man to say it was lost. She then refused an anonymous card vote which would have decided the matter fairly. Or not. Democracy in the Labour Party run by Corbyn, McCluskey, Milne, Murray and Formby has limits, you know.
As Emily said, unmissable. About 31 minutes in https://www.bbc.co.uk/iplayer/episode/m0008rt5/newsnight-23092019
Appalled Landlord
1:34 AM, 24th September 2019, About 5 years ago
I forgot to mention he fourth M round Corbyn, Screaming Karie Murphy. Sorry Karie.
Beaver
9:26 AM, 24th September 2019, About 5 years ago
Reply to the comment left by Dr Rosalind Beck at 23/09/2019 - 23:34
My favourite bit last night was when channel 4 news said that the labour party were going to go into the next election campaigning not to be for or against staying in the European Union. The reason I loved it so much was that I've always been a fan of Monty Python's Flying Circus.
But in fairness to the labour party...
They have recognised that if you are proposing another referendum and if remain is on the ballot paper, some kind of deal is also on the ballot paper then leave also has to be on the ballot paper; anything else is not democratic.