Prime Minister David Cameron is clamping down on buy to let by making sure private landlords cannot purchase homes under the Rent To Buy scheme.
In an overlooked clause in his announcement that funding was on the way to help builders put up more homes, property investors cannot snap up any of the homes with a buy to let mortgage.
The move is hailed as the first step by a major political party to curb the private rental sector.
The Rent to Buy scheme offers homes at a 20% discount on average local rents to tenants, plus first refusal on buying the home after five years.
Half the homes will be built in London, and the rest spread around the country.
The Strategic Society Centre, a think tank that researches housing, claims private landlords are a small number of voters that politicians should not fear alienating.
“There’s been a few whiffs of a change of attitude from the Conservative Party for a while, notably London Mayor Boris Johnson taking aim at London developments bought off-plan by overseas ‘oligarchs from Planet Zog’,” said think-tank director James Lloyd.
“Now, however, the prime minister has recognised both that reigning in the buying power of private landlords is a good thing for public policy, and there’s even political capital to be made from doing so.”
The Strategic Society Centre is also calling for the government to cap buy to let lending.
Lloyd also wants tenants moving into Rent to Buy homes to be banned from selling to buy to let investors.
Previous reports by The Strategic Society Centre have criticised private landlords as the cause of more people reaching retirement and having to claim housing benefits to pay their rents, increasing the welfare bill for the state.
Lloyd is also calling for mortgage lenders to advance loans to buyers rather than landlords and for the major political parties to increase capital gains tax on property to discourage landlords from investing in rental homes.