Plan to tackle housing shortage by paying landlords to sell their homes to tenants

Plan to tackle housing shortage by paying landlords to sell their homes to tenants

A Tory MP has backed a radical proposal to help people buy their own home – by encouraging private landlords to sell properties to their tenants.

It would mean giving landlords a tax break if they sell a property to the tenant, with the proceeds shared between both of them.

Landlords would be encouraged to sell, because they’d make extra profit, while tenants would get a discount on the price of the home.

The idea was endorsed by Solihull MP Julian Knight (Con).

He said: “A much much better idea than forced three year tenancies – a tax break to incentivise landlords selling to tenants.”

The scheme should be available once a tenant has been in a privately-rented property for two years, he said.

Many council house tenants have the right to buy their home at a discount but there is currently no similar scheme for tenants who rent privately.

The proposal, drawn up by think tank Onward, involves giving landlords a discount on the capital gains tax they would usually pay when selling a property which is not their main home. The discount would be shared between them and the tenant, cutting the cost of buying a home by £8,000 on average,



Solihull MP Julian Knight

It follows concerns that young people in particular are struggling to get on the housing ladder.

Figures show that the number of people who own their own homes in the West Midlands has fallen slightly, from 69 per cent in 1996 to 65 per cent in 2016.

But the big change is that people who rent are more likely to have private landlords.

In 1996, 23 per cent of West Midlands households were in rented social housing. That’s fallen to 17 per cent.

And the proportion in privately-rented accommodation rose from just seven per cent to 16 per cent.

New research has found around four in 10 young adults in England would not be able to buy one of the cheapest homes in their area even if they managed to save a 10% deposit.

As long as they had a 10% deposit, in 1996 over 90% of 25 to 34-year-olds would have been able to purchase a house in their area if they borrowed four-and-a-half times their salary, the Institute for Fiscal Studies (IFS) said.

But it found that by 2016, only around 60% of young adults would have been able to borrow enough to buy even one of the cheapest homes in their area – leaving properties out of reach for the remaining 40%.

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