A think-tank is proposing a novel way to increase home ownership among younger people and bring money into Government coffers.
The Centre for Policy Studies says its policy, called “Help to Own”, would encourage tenants to buy from their landlords while benefiting the Treasury.
In a discussion paper, the think-tank’s head of policy Alex Morton writes that the “UK needs an ownership revolution” but insists that “while we need to build more homes, we also need to ensure that more people are owner-occupiers, not renters”.
With private rents soaring and salaries not keeping up with rising property prices, it has become tougher than ever for first-time buyers to get on the property ladder.
“Help to Own” proposes that for one year only, the Capital Gains Tax paid by a landlord when they sell a property to a sitting tenant should become a rebate that is shared between landlord and tenant. This rebate would act as an incentive to the landlord to sell and would also help the tenant put a deposit together.
The policy suggests that the rebate be split with a third (33 percent) going to the landlord and two-thirds (66 percent) to the buying tenant.
According to the CPS, this policy would actually raise more funds for the Government while encouraging greater levels of home ownership among renters.
Alex Morton wrote: “If just one in 10 landlords took advantage of this policy, this would allow over one million people to move in to home ownership – a massive shift in a single year.
“If one in four landlords took advantage of this rebate and offered it to tenant, it would allow 2.5 million people to move into home ownership, more than the entire first decade of Right to Buy.”