Letting tenants buy their homes is only part of the story

The First Minister has announced another policy aimed towards private renters that will be implemented should the SNP be returned to Government. If a landlord sells their property, then the sitting tenant should have the first right of refusal to purchase their home.

This is, fundamentally, a good idea and one that Common Weal has suggested within our package of housing policies; however, it is only one part of that package and, standing alone, may well not have much of an impact on the lives of tenants. This is especially true given that he’s vowed that homes will be sold at a “fair market rate”, despite knowing that the market rate for housing at the moment is anything but fair.

The problem, as we’ve highlighted before, is that in order for a tenant to purchase a home – especially at the inflated rates we see today – they typically need to have enough savings to be able to put down a deposit. The SNP’s joint proposal for £10,000 equity loans for tenants is simultaneously not enough to help those most likely to need it and immaterial to those wealthy enough to pay a deposit without it – meaning that the window of opportunity for those who can benefit from these loans is extremely narrow and not likely to include many people who are privately renting and at risk of losing their home due to a landlord selling up.

Many countries in Europe have tight regulations around the treatment of tenants during sales, with it being essentially unthinkable that a landlord could sell their house without the tenant remaining in place – this is a policy that would have a significantly greater impact than the first right to buy if it stood as a policy alone.

Another policy that we’ve strongly advocated for is for Local Councils to have the right to step in and purchase private rented homes when a private landlord sells. These houses would be brought into (and in many cases returned to) the public rental stock. Again, these purchases should include the tenant remaining in place and for them to be given a long-term, secure tenancy and social rented rates for as long as they wish to stay there.

Further policies such as tightening regulations around landlords, rent controls for tenants who remain in the private sector, more aggressively taxing multiple house ownership, and a long-term plan of social housing building designed to actively outcompete the private rented sector on price and quality will all go further towards protecting tenants and rebalancing a badly skewed housing sector.

Ultimately, while this policy is a decent one in itself, it begs the question of what the Government thinks housing is actually for. The purpose of a house should be to provide a safe, secure and stable home for the person living in it. It should not be a capital-accumulating asset designed to enrich those already relatively wealthy at the expense of those who are not. Nor should the purpose of housing be to provide a pot of wealth to subsidise the poor state of the UK public pension.

Individual policies can and should be judged on their individual merits, but the story we tell about things like “What is a house for?” is far more important. Only once we have told that story can we start to build the policies to get us to that desired outcome. Common Weal believes that a house should be a home. We’d like to see the various political parties tell us before the election what they believe it should be.