(fashion) Labour could give tenants who rent private homes the right to buy them at a cut-price rate, the Shadow Chancellor has revealed.
John McDonnell outlined the party’s incendiary plans to ‘tackle the burgeoning buy-to-let market’ in a bombshell interview last night.
The dramatic policy is designed to clamp down on middle-class families who buy a second property as a nest egg for their retirement.
The suggestion from the Shadow Chancellor – applying Margaret Thatcher’s iconic right for council tenants to buy their homes to those who rent properties from millions of private landlords – offers a chilling insight into the consequences of a Labour victory in any snap election.
And in a separate development, a report found Mr McDonnell is planning to confiscate around £300billion of companies’ shares and hand them to workers in one of the biggest state raids on the private sector to take place in a Western democracy. Last night critics said the ‘frightening’ measures could lead to a crash in property prices, a new mortgage crisis, a rise in homelessness and even a recession.
Britain's opposition Labour party's shadow Chancellor John McDonnell speaks during an event to set out his party's approach to the Government's Spending Review, in central London on August 29, 2019
The new ‘right to buy’ scheme would see private tenants given the right to forcibly buy the home they live in at a discounted price set by the Government. The UK’s 2.6million landlords would also face higher taxes, Mr McDonnell said.
In an interview with the Financial Times, the Shadow Chancellor called the idea ‘great and radical’ as he laid out his wish to ‘tackle the burgeoning buy-to-let market’. He said: ‘You’d want to establish what is a reasonable price, you can establish that, and then that becomes the right to buy. [The Government] set[s] the criteria. I don’t think it’s complicated.’
Mr McDonnell said he believed the idea would reverse problems caused by Mrs Thatcher’s policy, whereby council tenants were able to buy their home from the state. He said: ‘We’ve got a large number of landlords who are not maintaining these properties and are causing overcrowding and problems. In my street now... a third of the houses are right-to-buy, badly maintained, overcrowded. It’s horrendous.’
Jeremy Corbyn hunts for the right combination for his bike lock in London today
Critics say the move could cause chaos in the private rental market, leading to a collapse in housebuilding and a worsening of the housing crisis.
And it could lead to a house price crash that could see hundreds of thousands of homeowners fall into negative equity – when their mortgage debt is higher than the value of their home.
Scrutiny of Jeremy Corbyn’s policies is ramping up amid fears Brexit turmoil could spark a snap general election. The policies were met with incredulity by MPs last night.
Michael Fabricant MP, former vice-chairman of the Conservative Party, said: ‘McDonnell has promised he