Right to Buy from a Private Landlord - Could This Happen?

Tenants having the right to buy from a private landlord. Could it happen? Well, the Joseph Rowntree Foundation (JRF), a charity that funds research to end poverty, thinks that this scheme would work.

In a recent policy briefing, the organisation stated that the private rental sector needed to shrink and, although supplying new homes is important for ending the housing crisis, we should also “place a much greater focus on the 25 million homes we already occupy, both to address the cost of housing and to explore the strategies, levers, and policies which can be utilised to rapidly shift who they are owned by and in whose interests.”

The foundation’s idea is to implement a version of Right to Buy, Margaret Thatcher’s 1980s policy that allowed council tenants to own their properties. However, the new policy would favour first time buyers in the mortgage market, making it easier for them to buy their landlord’s property.

This article explains how the right to buy from a private landlord would work, according to the JRF.

Right to Buy From a Private Landlord: The Details

The charity says it wants the government to put in place plans to reduce the private rental sector, by “rebalancing the position of first-time buyers and landlords in the mortgage market and discouraging property speculation.”

As well as adjusting the regulations surrounding mortgages to favour first time buyers, the JRF wants the government to place higher taxes on landlords so that they discourage people from investing in property. It suggests making adjustments to stamp duty, capital gains, and council tax for landlords that cut their profits from renting properties.

It thinks that landlords should be encouraged to take their money out of property and invest in other fields.

The second phase of the plan is to work on ways to distribute properties fairly after landlords have been edged out of the market. They want help for tenants to become homeowners in these properties or for housing associations to take on some of the stock and refit them to a high standard and rent them at a lower rate.

Where landlords remain, the JRF wants them to gain funding to retrofit them to a high environmental and quality standard before renting them out at a rate below the market.

Reaction from Landlords

Unsurprisingly, landlords have not reacted favourably to the suggestions for a right to buy from a private landlord plan.

One online commentator said: “these different organisations just don't seem to grasp the fact that a Housing Shortage isn't resolved by changing who owns the property.” Another commented, “the tenants get the right to buy, so they're sorted. What about the next generation coming up? Oh hang on, the rented properties have all been sold. So where do they live? In rented property that isn't available/hasn't been built?”

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