The Generation Rent activist group says landlords should sell to their tenants at a discount if they are getting a hefty reduction in Capital Gains Tax.
The group was responding to the Tory manifesto commitment to scrap CGT for two years when landlords sell to their tenants.
Dan Wilson Craw, the deputy chief executive of Generation Rent, said: “To really have an impact, a portion of this tax break needs to go towards a discount on the price for the tenant, otherwise few will be able to afford to buy out their landlord.
“But many tenants aren’t in a position to buy at all: 23,000 households faced homelessness between April and December 2023 because their landlord was selling up. Tenants should therefore have the option to nominate another buyer, such as a housing co-op or the council, who would allow them to stay. This would mean the policy not only boosted home ownership but reduced homelessness too.”
Ben Beadle, chief executive of the National Residential Landlords Association, blamed moves like the 3% stamp duty surcharge on diminishing rental stock.
He said: “Tenants who want to become homeowners should be supported to do so. Whilst incentivising landlords to sell to existing tenants has the potential to help, it will not reverse the damage to the rental market caused by tax hikes under recent Conservative governments.
“As the Institute for Fiscal Studies has warned, changes to mortgage interest relief and the level of stamp duty paid by landlords have led to higher rents and stifled the supply of homes across the private rental market.
“This comes at a time when the number of tenants enquiring about every available rental property has more than doubled compared with before the pandemic.”
