Housing experts have blasted Labour plans to ban buy-to-let being used on new homes as a “nightmare” claiming it is unworkable and would harm tenants.
In its housing review, led by Sir Michael Lyons, Labour proposes handing councils the power to ban new build houses being left empty or used for buy-to-let.
Labour is proposing giving first-time buyers priority for two months in up to 50 per cent of properties.
But experts have branded the plans unworkable because councils would need to identify the intentions of all buyers, including those with cash.
National Landlords Association chief executive Richard Lambert says: “Without imposing new covenants or planning restrictions, which would risk scaring off investors, homeowners and lenders alike, it remains unclear how they could achieve this goal [of prioritising first-time buyers and blocking buy-to-let].”
He adds: “There is very little competition between landlords and first-time buyers. Restricting up to 50 per cent of potential buy-to-let transactions seems unnecessary when just 14 per cent of total mortgage transactions are either buy-to-let or buy-to-let remortgages, and often the types of properties that landlords and first-time buyers are attracted to are very different.”
John Charcol senior technical manager Ray Boulger says the changes would be a “nightmare” to enforce and hurt tenants.
He says: “Why does Labour want to discriminate against tenants? Although there will be a number of people renting who want to buy, there will be some who choose to rent or have no chance of buying.
“Tenants will have less choice and rents will go up because there is less rental property. If you prioritise one part of the market over the other then you are putting the other at a disadvantage.”
Buy-to-let consultant David Lawrenson says: “It seems impractical. It creates political risk which puts off investors which creates fewer buy-to-lets and pushes up rents.”