Labour leader Jeremey Corbyn plans to wreck the financial plans of thousands of investors with radical smash-and-grab plans to share their wealth with tenants and workers.
If Labour wins the next General Election, millions of private renters will be given the right to buy their buy to let homes at a ‘reasonable price’.
Shadow Chancellor John McDonnell explained the plan would tackle the country’s ‘burgeoning buy to let market’ and growing numbers of landlords who fail to maintain their properties properly.
The right to buy scheme would give tenants the right to buy the home they are renting at a discount price set by the government.
McDonnell also threatened to raise taxes for landlords.
Right to buy plan
“You’d want to establish what is a reasonable price, you can establish that, and then that becomes the right to buy. The Government sets the criteria. I don’t think it’s complicated,” he said.
“We’ve got many landlords who are not maintaining these properties and are causing overcrowding and problems. In my street now… a third of the houses are buy to let, badly maintained, overcrowded. It’s horrendous.”
The policy was first mooted by Jeremy Corbyn in his bid to win the leadership of Labour in 2015.
Chris Norris, the National Landlord’s Association director of policy and practice, said: “To suggest that private landlords should be selling their properties to their tenants at a below market rate arbitrarily set by politicians is ludicrous. Landlords had to pay market rates themselves. It’s only right that, if they decide to sell it, they can do so at market rates.
“If Labour does indeed wish to fix the housing crisis, they should focus on encouraging the government to build more social housing, which is what the housing sector is lacking.”
Share and share alike
Meanwhile, 7,000 large companies will have shares worth £300 billion handed to workers.
The plan calls for all companies with more than 250 employees to switch 10% of their shares from private ownership and hand them to their workers over a 10 year period.
Business experts say the plan is ill-judged and is likely to cost pension funds around £31 billion.
“The aim of this policy – giving employees an ownership stake in their companies – is laudable. However the method is entirely misconceived,” said Dan Neidle, a partner at law firm Clifford Chance.