The English language is ever-changing and to signify that we only have to look at the recent additions to the Oxford English Dictionary. Are you familiar with ‘manspreading’ which sounds slightly painful but is actually defined as ‘the practice whereby a man, especially one travelling on public transport, adopts a sitting position with his legs wide apart, in such a way as to encroach on an adjacent seat or seats’. Actually it probably is painful for those trying to sit next to the person in question.
And then there’s ‘hangry’ – a combination unsurprisingly of hungry and angry and used to describe being ‘bad-tempered, or irritable, as a result of hunger’. We’ve all been there I think. Also, in the world of economics both ‘Brexit’ and ‘Grexit’ have made it into the latest updates to describe Britain’s and Greece’s potential to leave the EU and/or the Euro. Finally, for those with children obsessed with video games, I’m sure you’ve all seen them ‘rage-quitting’ at some point meaning to ‘angrily abandon an activity or pursuit that has become frustrating’. Again, we’ve all felt like that at one time.
Indeed, looking at the recent contest to become leader of the Labour Party I wonder if many former members of the Shadow Cabinet exercised their right to ‘rage-quit’ following the election of Jeremy Corbyn as leader. I also can’t help but wonder if we’ll see the addition of ‘Corbynomics’ to the Oxford Dictionary at some point soon or perhaps, if the majority of the Parliamentary Labour Party (PLP) have their way, the whole Corbyn-era and his economic policy will be consigned to the dustbin of history in a very short space of time. Time will tell.
It has been fascinating to watch the recent goings-on in the Labour Party and one can’t help wonder if the constant calls for unity behind the new leader will actually bear fruit or if it is all destined to end in disaster. Certainly, from a housing market perspective, particularly the private rental sector, there appears little doubt about what Corbyn wants to achieve. Much like the Labour Manifesto earlier this year there is likely to be a big focus on tenant rights and I think we can be assured that any Corbyn-led Labour Party is going to be calling for caps on rent, regulation of letting agents, and licensing of landlords.
During the leadership campaign Corbyn also proposed an extension of the Right to Buy for tenants renting in the private sector. He said this would be done via large discounts on mortgages rates which would be funded by taking away all of the tax relief on mortgage interest payments available to landlords, not just dropping it down to a basic rate as the Government has introduced.
To say this is a radical policy is an understatement and, without seeing the detail, I am at a loss as to how it would be workable. Would the Government have to effectively force private landlords to sell their properties to private tenants who wanted to purchase, or would this be a voluntary arrangement where the landlord wants to sell and the tenant wants to buy?
Knowing the political leanings and thrust of Corbynomics, one can’t help think that this policy might be on the basis of the former rather than the latter and then you have a whole heap of trouble. Even if it is a voluntary arrangement how many landlords – who tend to invest in property for the long-term – would want to make this type of sale? Perhaps if Corbyn ever gets to power, they would think long and hard about it because the likelihood is the attractiveness of buy-to-let as an investment is going to be far less with such a Government.
This seems obvious given those other potential policies presented during Corbyn’s campaign; for example, capping rents would be an utter disaster and you would have a mass migration from the sector with much-needed private rental housing stock removed wholesale. It happened in the early 1970s and it would undoubtedly happen again.
The focus here appears to be a more left-wing continuation of Labour’s private rental sector policies espoused during the General Election – it is firmly based on the belief that ‘landlord bad, tenant good’ and it unfortunately is one that fails to understand the contribution made by private landlords to the overall UK housing market. On this issue there has always been a clear divergence between the Conservative Party and the Opposition; with Corbyn’s election as leader those differences are about to get more pronounced. We await with interest the detail on those policies but it appears at this early stage that landlords will be in the political spotlight for some time to come.
Bob Young is chief executive officer of Fleet Mortgages