Landlord Knowledge - The Home of Savvy Buy to Let Property Investors

If Jeremy Corbyn became Prime Minister….

The Labour party has a new Leader and whilst some may feel that his election guarantees another Conservative Government in 2020, others feel that his return to grass roots Socialism could mobilise the young. We are 5 years away from the day he either does or doesn’t become Prime Minister, but he is already making pronouncements on what he would do if he was in charge and some make disturbing reading for private sector landlords.

Right to Buy can be a good thing for some social tenants, seeking to own their own homes. Not for all, as they struggle to pay mortgages and maintain their properties to the same standard as those who remain tenants and see their homes re-furbished on programmes. What is certain is that since Right to Buy was introduced in 1980, 1.5 million homes, funded by public money, have been sold (many of them to become private sector lets). This is a huge depletion of the housing stock and must be abhorrent to politicians who are aware of the great need there is for social housing. New Labour did not see fit to repeal this legislation, but surely the ultra left wing Mr. Corbyn would take steps to do so?

Not according to the recent article in the Daily Telegraph. Mr. Corbyn believes that introducing Right to Buy for private sector tenants would be a beneficial step. For whom, one might ask. Many local authorities have been dependent on the private sector for years to house the homeless or those in over-crowded accommodation, stuck on ever-growing waiting lists for social housing. Plans to impose Right to Buy on the private sector will have a disastrous effect on the rental market.

A common scenario is the landlord who buys a run-down property, refurbishes it to a good standard to make it an attractive home for a family. What incentive is there to do this if 2 or 3 years down the line, he could be forced to sell it to the tenants? He may only just be re-couping in rental income the cost of the improvements he has made. Will this mean properties will be improved to a lower standard, at a time when landlords are seeking to improve accommodation?

Landlords have done and continue to do a valuable service in housing the most vulnerable and get little respect for it. Why would a landlord do major renovations for a tenanted property when the tenant could then ask to buy it? It happens in social housing, as tenants wait for re-furb programmes to be completed before their application for right to buy goes in; private tenants would be equally ‘canny’. Need a new roof? Cost £4-5000? It wouldn’t make economic sense, so just patch it up in case the tenant wants to buy.

If this went ahead, and it is difficult to believe that no-one would speak up and help him see sense, it would reduce investment in the sector, which would itself become smaller; there will be fewer homes available to those that need them. It may be a vote-catcher for working private tenants, but this has been ill-thought out and the possibility of it is a horror story for those that are benefit dependent or have traditionally been housed in the private sector.

For advice on buy to let issues – General Knowledge