The recent report from the Joseph Rowntree Foundation (JRF) calling for the Government to provide private renters with a right to buy the property they live in is a further example of ‘pie in the sky’ economics says a leading property firm.
DJ Alexander, the largest estate and letting agents in Scotland, says proposals such as this do nothing to help people get on the property ladder and are more likely to exacerbate housing shortages rather than relieve them.
The report suggests the government should be “supporting renters to buy the home they live in, including through a Right to Buy for private renters.”
It also calls for the Government to intervene in the mortgage market and discourage lenders from providing funds to landlords and property investors – something one building society has already taken up.
“This makes no sense at all,” says David Alexander, chief executive of DJ Alexander.
He argues that tax payers should not subsidise renters to purchase the property they live in because then everyone who “wasn’t a renter should also be supported to buy their home. You can’t subsidise one part of the market and not the rest”.
“Aside from being hugely inflationary it also fails to understand that a lot of people are happy to be in the private rented sector.
“The private rented sector is an essential element of the housing market and any proposals to reduce its scale should be looked at with caution.
“The other key mistake in the logic of this JRF report (pictured) is that they misunderstand the role of landlords.
“These are people who own properties which they rent to tenants. They are not obliged to provide this service but do so as an investment. They can just as easily withdraw from the market and invest their money elsewhere.”
“A tenant buying a property from a landlord doesn’t need government intervention as it can already happen, it just requires a willing landlord and for the tenant to pay the market value. The JRF seem to be assuming that market conditions don’t exist in property but exist in all other aspects of life.”