The Scottish National Party (SNP) has proposed a new policy granting tenants the right of first refusal if their landlord decides to sell the property. This plan, announced ahead of the Scottish elections on 7 May, aims to support renters who struggle to save for a deposit and face the upheaval of losing their homes when landlords sell. However, the proposal has sparked significant criticism from political opponents and landlord organisations, highlighting concerns over market impact and practical implementation.

Details of the SNP Proposal

Under the SNP’s plan, tenants in Scotland would be given an exclusive period to purchase the property they rent if the landlord puts it on the market. The purchase price would be set at a “fair market rate,” although the precise definition of this term remains unclear. The policy is intended to provide renters with an opportunity to secure home ownership and avoid the disruption caused by landlords selling their properties.

Government Perspective: Supporting Renters

First Minister John Swinney emphasised the policy’s potential to assist young people trapped in the rental market. He noted that many renters pay more in rent than they would on a mortgage, leaving them unable to save for a deposit amid rising living costs. Swinney stated: “So many people are stuck paying more on rent than they would on a mortgage, and with costs just going up and up, there is nothing left over at the end of the month to save for a deposit.”

He further highlighted the personal and financial consequences for tenants forced to leave their homes due to sales, describing the policy as a way to give renters “the right to first refusal on the home they live in, at a fair market rate, if the owner of the property decides to sell.”

Political and Industry Backlash

The Scottish Conservatives have criticised the proposal as a “reckless intervention” in the housing market. Housing spokesperson Meghan Gallacher warned that the policy could deter landlords from letting properties, reducing supply and making it more difficult for first-time buyers to enter the market. She argued: “Far from doing what John Swinney thinks it will do, it will spook landlords, choke off supply and instead make it even harder for first-time buyers to get on the ladder.”

Gallacher also outlined the Conservative alternative, which includes scrapping the Land and Buildings Transaction Tax (LBTT) and delivering 80,000 affordable homes to improve home ownership prospects.

Concerns Over ‘Fair Market Price’ Definition

The Scottish Association of Landlords (SAL) has welcomed efforts to increase housing availability but expressed reservations about the policy’s practical details, particularly the meaning of “fair market price.” SAL chief executive John Blackwood said: “Many landlords tell us that they would prefer to sell to their tenants and allow them to stay in their homes, saving landlords the hassle of ending the tenancy and marketing the property for sale.”

However, Blackwood emphasised the need for clarity on pricing to understand who the policy will ultimately benefit. He also called for a shift in dialogue from landlord versus tenant rights to a partnership approach, stressing the importance of incentivising landlords to invest and maintain a diverse housing supply, including the private rented sector.

What this means for landlords

If implemented, the SNP’s proposal could significantly affect landlords’ ability to sell properties freely on the open market. The requirement to offer tenants first refusal at a fair market price introduces uncertainty around valuation and timing, potentially complicating sales processes. Landlords may face longer periods before completing sales, and the policy could discourage investment in rental properties if perceived as restrictive.

Moreover, the lack of a clear definition for “fair market price” raises concerns about potential disputes and financial implications. Landlords and agents will need to monitor forthcoming legislation closely to understand how these provisions will be applied and enforced.

Looking Ahead to the Scottish Elections

The SNP’s policy forms part of its broader housing strategy as the Scottish elections approach on 7 May. Meanwhile, organisations like SAL have urged politicians to reconsider their stance towards landlords to address the housing crisis effectively. The debate highlights the ongoing tension between tenant protections and landlord rights in Scotland’s evolving housing landscape.

Source: Based on reporting from Property118

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