Labour needs to re-think its sequestration proposals

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Right-to-buy:

Right-to-buy was a main plank in the Thatcher era property
owning democracy drive, when the Conservatives introduced laws to allow council
tenants to buy their homes at discounted prices.

David Alexander, MD of DJ Alexander, Letting and Estate
Agents in Edinburgh and Glasgow, says, perhaps what’s good for the goose, is
good for the gander? Why shouldn’t the shadow Chancellor of the Exchequer John
McDonnell propose applying the same medicine to private landlords’ properties?

Mr McDonnell of course has suggested it may become Labour policy
to give private tenants the right to buy their rented properties’ at discounted
prices.

“A compulsory ‘right to buy’ in the private rented sector is
just plain loopy,� says Mr Alexander, writing for The Scotsman newspaper. Descend from planet Zog to planet earth and
it becomes clear the consequences would not only destroy confidence in the
housing market as a whole but create havoc in the national economy by
trip-starting a massive flight of capital from the UK,� he says.

In all seriousness Mr McDonnell reiterated the idea following a wider report Where We Stand: Housing for the Many in an interview last weekend.

But there’s a big difference between the government selling
off council houses at below market value when council homes are public property,
and applying the same logic to private property.  The council house building initiative was a massive
Second World War building programme funded by central, not local government, continuing
up until the 1970s, so a Westminster inspired sell off was perfectly logical argues
Mr Alexander.

On the other hand the effective sequestration of private property
goes against every tenet of a free democratic society: over a thousand years of
English common law, the British Constitution built on individual rights set-out
variously in Magna Carta 1215, the Petition of Right 1628, and the 1689 Bill of
Rights, also known as the English Bill of Rights, not to mention the United
Nations Declaration of Human Rights of 1948 and the European Convention on
Human Rights of 1950.

It has long been argued that relative prosperity in the West is a direct result of the rights conveyed in these principles; not so of course in communist countries, largely of the east, where collective ownership, not private ownership of real property was a fundamental part of the Marxist theory and philosophy. 

“Look around the globe: countries where the law respects
property rights have free and fair elections, freedom of speech and consumer
choice; those who do not tend to be authoritarian and struggle economically.

“Requiring landlords to offload their own private assets
(especially at below-market rates) is totally different. It also seems ironic
given that most private landlords have managed to buy into the market through
taxed income amassed by their own efforts rather than inherited wealth; indeed
it is probably fair to say that many of them were brought up in Labour-voting
households.

“So while a compulsory “right to buy� in the private rented
sector is wrong in principle, in practical terms it is just plain loopy.
According to the shadow chancellor, the outcome would be improved quality as
too many landlords spend too little money on their properties to make a “fast
buck�. “In my street now… a third of the houses are right-to-buy, badly
maintained, overcrowded; it’s horrendous,� says Mr Alexander.

“If there is concern about safety and overcrowding in
privately-rented homes then affected tenants would be better served by a future
home secretary making sure the full force of the law is brought down on “rogue�
landlords rather than penalising responsible owners.

“But if a law giving tenants the right to buy is ever
foisted on the private sector there will be few responsible landlords left
because most will have sold up before a compulsory sales regime further
diminishes their properties’ value. Where will that leave Labour voters for
whom renting privately is essential because they can’t raise the deposit on a
mortgage?� askes Mr Alexander.

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