Groups representing both tenants and landlords have reacted coolly to the Conservative manifesto which was deemed short on new initiatives.

Rishi Sunak pledged to pass the Renters (Reform) Bill if re-elected next month and to deliver the court reforms necessary to fully abolish Section 21 and strengthen other grounds for landlords to evict private tenants guilty of anti-social behaviour.

He vowed to complete the process of leasehold reform and to cap ground rents at £250, reducing them to a peppercorn over time as well as ending the misuse of forfeiture and making it easier to take up commonhold. The Conservatives would also continue support for leaseholders affected by historic building safety problems by requiring the continuation of developer funded remediation programmes for mid and high-rise buildings. Councils would get the powers needed to manage the uncontrolled growth of holiday lets.

Housing stock

The only real new initiative was a promise to scrap capital gains tax for landlords who sell their property to tenants as part of a two-year scheme to free up more housing stock and help long-term renters get on to the housing ladder. It is set to cost £20 million a year.

The Telegraph explains that landlords who sell their rental properties to sitting tenants would get a tax break worth more than £21,000 on average. However, BTL investors would only be able to use the exemption if they sell their properties to tenants who were renting from them on 10th June, designed to stop anyone from bringing in tenants they know can afford to buy at the cost of an existing renter who cannot.

Incentivising

Ben Beadle, NRLA chief executive (pictured right), says tenants who want to become homeowners should be supported to do so. However, he adds: “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. Reform of the rental market should have taken place in the last Parliament.”

Dan Wilson Craw, deputy chief executive of Generation Rent, says for the new proposals 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. He adds: “Many tenants aren’t in a position to buy at all…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.”

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