The Government is now considering both a carrot AND stick approach to reducing the size of the private rented sector and the number of landlords, it has been claimed.
Several national newspapers have been briefed by Whitehall insiders that Ministers are mulling a plan to tempt buy-to-let landlords into selling properties to first-time buyers by charging lower Capital Gains Tax.
The Daily Mail says that although in the very early stages, the Prime Minister is keen to do something radical on housing before the next election.
Landlords currently pay 18% on any gain as a basic rate taxpayer or 28% as a higher rate taxpayer.
The Sun quotes a source close to the discussions as saying: “The Prime Minister wants to shrink the buy-to-let market”.
The Tories have been attempting to force smaller portfolio landlords out of the market for several years now since David Cameron began raising duties and lowering tax breaks for private landlords.
That is working – Propertymark has said many agents are reporting smaller landlords selling up, particularly as evictions may soon get more difficult once the Renters Reform Bill goes through.
Officials have also suggested doing more to help young people by persuading older people to move out of their family-sized houses into smaller homes better suited to their needs, as almost four in ten properties are officially ‘under-occupied’.
This could be facilitated by reducing the amount of stamp duty that pensioners have to pay if they move to a smaller home.
Former housing minister Christopher Pincher previously told the House of Lords that the government wanted to encourage more developments suitable for pensioners, so freeing up space in semi-detached houses and opening up more properties down the chain for first-time buyers.