Jeremy Corbyn is now the new Labour Party leader. So what does this mean for the property market?
In the past, Corbyn has pushed for rent controls and a letting agent fee ban. Additionally, he would like an extension of the right to buy scheme to include private tenants, meaning that they could buy their homes at a discount.
Meanwhile, Corbyn would suspend right to buy for councils in certain areas, such as expensive parts of London.
In June, he announced that he would extend right to buy to the private rental sector, saying: “We know that generation rent faces an uphill struggle simple to get into long-term housing.
“We have seen some good ideas from Labour to establish more secure tenancies for renters. Now we need to go further and think of new ways to get more people into secure housing.
“So why not go with right to buy, with the same discounts as offered by way of subsidised mortgage rates, but for private tenants and funded by withdrawing the £14 billion tax allowances currently given to buy-to-let landlords?
“I believe this idea could open up the possibility of real secure housing for many currently faced with insecurity and high rents.”
It has been suggested that the right to buy extension to private tenants would be aimed at those renting from larger landlords, but this has yet to be confirmed.
Corbyn also pledges to build 240,000 new homes per year, and is considering banning foreign offshore companies from owning British homes.
The Labour backbench MP for Islington North has also indicated that he wishes to introduce rent controls and regulate letting agents.
He has consistently voted to ban letting agent fees charged to tenants and prospective tenants, for three-year tenancies to become the default and for restrictions on rent increases in long-term tenancies.
In October 2013, Corbyn introduced a Private Member’s Bill, “to provide for the regulation of letting agents; to protect tenants’ deposits; to require the enforcement of environmental and energy-efficiency standards in private-sector rented accommodation; to amend the law on secure tenancies; to provide for fair rent to be applicable to all rented accommodation; to require landlords not to discriminate against people in receipt of state benefits; to require local authorities to establish a private rented sector office; and for connected purposes.”
Corbyn states: “When the Government tells me that the cost of private rented accommodation is one of the main drivers of this country’s large housing allowance bill, I absolutely agree with them.
“However, the way to deal with it is not by restricting the level of housing benefit paid to tenants but by controlling the level of rent that is paid.”
His Bill did not amount to anything, but his views have not changed.
He would like to see private sector rents equate to local average earnings.
One of Corbyn’s recent speeches was in Cambridge this month, where 1,200 people packed in to watch and a further 100 stood outside to hear.
He talked of state-funded mortgages to help get young people onto the property ladder. He also described Cambridge’s private rental sector as “out of control”.
He claimed that Cambridge is one of the most expensive parts of the UK to rent, along with London, Oxford and York.
He said: “You see an out of control private rented sector, with private sector landlords charging absurdly high rents that are subsidised by DWP [Department for Work and Pensions] payments through housing benefit.
“Can’t we instead turn it round, regulate the private rented sector, control the levels of rents and give people real security for remaining in those places, rather than six-month short-hold tenancies with all the stress and tension that does to those people, or children forced to move schools every six months.”
In the same speech, he did not back the claim that a greater supply of housing would solve the crisis.
He added: “The property boom can be reduced a bit by more building, but the crucial part is to get young people on the housing ladder, which I would look to achieve via a state mortgage scheme.”1
1 http://www.propertyindustryeye.com/new-labour-leader-would-extend-right-to-buy-to-private-tenants/