It’s now written to Hunt asking him to allow the CGT only to those landlords who sell with tenants in situ.

Indeed, Generation Rent describes the move as “utterly thoughtless”.

A blog on its website says: “An utterly thoughtless move by the Treasury, and counterproductive, especially given how damaging homelessness is for local government finances. 

“It might bring in more tax revenue, but tenants will pay the price in stress and upheaval, raiding savings to pay for an unwanted move.

“Landlords selling up doesn’t have to result in their tenants losing their homes. Some tenants might be able to buy their landlord out, while many homes sold by landlords are bought by landlords, so it is senseless for tenants to be evicted by default.”

The letter to the Chancellor – from Generation Rent chief executive Ben Twomey – reads:

Dear Chancellor,

I was dismayed to hear your announcement as part of your Budget to cut the rate of Capital Gains Tax on residential property disposals, which Generation Rent believes will fuel homelessness.

You stated that this measure would “increase revenues because there would be more transactions”. I urge you to consider the impact that higher sales volumes by landlords will have on the tenants of their properties. 

In most cases, a landlord selling a property will evict the tenant in order to sell the property vacant, using Section 21 of the 1988 Housing Act.

Tenants in these situations will have two months to move out and it can be very difficult to find a new place to live in that time, especially when you had no intention of moving, rents have risen in your local area, and you are not financially well-prepared. 

In many cases these will be aspirant first-time buyers who must dip into their savings to cover the cost of a removal van, cleaning, and rent on two places at once, setting their dreams back.

Landlords selling properties is a leading cause of homelessness, with 16,470 households made homeless or threatened with homelessness in the six months to 30 September 2023.

An increase in property sales will only increase this figure, putting a greater burden on local authorities which are already struggling to discharge their homelessness responsibilities.

To mitigate this, I hope you will consider making the lower rate of Capital Gains Tax conditional on the property being sold with a sitting tenant, with a renewed tenancy that prevented a Section 21 eviction in future, or being sold to the tenant. This would make sure that no one lost their home for the sake of a lower tax bill for landlords and a modest boost to the Exchequer.

I am disappointed to be writing this letter as we welcome wholeheartedly your other major announcement on property tax: the abolition of the furnished holiday lets scheme, which we and our supporters have been campaigning for since the rapid growth of holiday lets during the pandemic.

I would welcome an opportunity to discuss this with you and your officials in more detail.

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