The Generation Rent activist group says the Conservative manifesto pledge to give a tax break to landlords selling to tenants should be accompanied by those landlords being forced to sell at a discount.

Specifically, the Tories propose to have a two year temporary scrapping of Capital Gains Tax if private landlords sell their homes to the sitting tenants.

Dan Wilson Craw, the deputy chief executive of Generation Rent, says: “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.”

The Conservatives proposed resuscitating the Renters Reform Bill – the original version had insufficient time to pass through Parliament when the July 4 General Election was called. 

Wilson Craw says on this pledge: “No-fault evictions make life intolerable for private renters, fuelling homelessness and making it difficult to complain about problems in your home. It is reassuring that the Conservatives remain committed to abolishing these evictions.

“But to enjoy genuinely fairer renting, tenants need stronger protections when evicted for reasons beyond our control, and from unaffordable rent increases that force us out of our homes.

“Most renters would prefer to be home owners but high rents make it hard to save and high house prices mean many of us don’t qualify for a mortgage. These proposals won’t reduce either, and risk pushing prices up further.” 

Meanwhile Ben Beadle – chief executive of the National Residential Landlords Association – says more comprehensive tax help should be given to landlords.

He comments: “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.” 

Responding to the Conservative Party’s pledge to end section 21, Beadle adds: “Reform of the rental market should have taken place in the last Parliament. As we said then, a balance between security for tenants and policies which retain the confidence of responsible landlords is crucial if we are to deliver much-needed homes for rent.

“That balance can only be achieved by fixing a broken justice system so that tenants and landlords can enforce their rights when section 21 ends in a timely and effective way.  As the Law Society has warned, reform risks being ‘in vain’ without investment in legal aid support and the courts.”