A new report backed by more than 50 housing organisations has proposed allowing first-time buyers to convert their student loan debt into a government-held equity stake in their homes – a radical approach to helping renters onto the housing ladder.
The Rebuilding the Ladder report, produced by Enfield Council and Pocket Living’s First Time Buyer Commission, found that 85 percent of renters want to own their own home but more than half believe this is impossible.
Student debt converted to equity
Under the proposal, developers could sell some new homes at a discount of at least 20 percent to first-time buyers with student debt as part of their Section 106 agreements. The government would then write off the buyer’s debt in exchange for an equity stake in the property, redeemable upon sale.
The report argues this would work for the Treasury because “a large share of the student loan book is already expected never to be repaid in full” – converting that debt into appreciating property assets instead.
Chris Curtis MP, chair of the First Time Buyer Commission, said: “There is no doubt that it has become harder for younger generations to buy a home, with the average age of a first-time buyer now sitting at 34, and many relying on support from the bank of mum and dad.”
He added: “And there is no doubt about why: Britain has catastrophically failed to build enough new homes. Supply has simply not kept up with demand, and prices have risen as a consequence.”
London exodus accelerating
The report found alarming trends in London specifically, with 42 percent of renters saying they do not want to leave the capital but feel they may have to – up from 22 percent as recently as 2023.
This follows Landlord Knowledge’s reporting on Resolution Foundation research showing half of renters earn enough for a mortgage but only 15 percent have a deposit.
Paul Rickard, chief executive of Pocket Living, said: “From converting student loan debt into equity, reforming the mortgage market, and giving greater certainty to developers to develop, all of these strong recommendations have the potential to make a meaningful difference to hundreds of thousands of would-be first-time buyers across London and the wider UK.”
Other proposals in the report include a five-year interest-free 15-20 percent government equity loan for first-time buyers, a stamp duty holiday for first-time buyers, and a new ‘Rent to Own’ fund financed by capital gains tax receipts from existing landlords.
The report has been endorsed by major developers and housing bodies including Barratt Redrow, Vistry Group, L&Q and Zoopla.
What this means for landlords
- Tenant pipeline: If implemented, schemes like this could accelerate tenant exits into homeownership – particularly affecting landlords in starter home markets
- CGT risk: The proposal to fund a ‘Rent to Own’ scheme from landlord CGT receipts signals continued pressure on property investment taxation
- Supply pressure: The report underlines chronic undersupply as the root cause of affordability problems – a factor that supports rental demand until building catches up
- Bottom line: These are proposals, not policy – but they reflect growing political momentum behind measures to help renters buy at landlords’ expense
Editor’s view
The report correctly identifies undersupply as the fundamental problem. But the proposed solutions lean heavily on redistributing from landlords rather than simply building more homes. Schemes funded by CGT receipts treat landlord sales as a revenue stream rather than a symptom of policy driving investors from the market.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 27 March 2026
Sources: First Time Buyer Commission, Enfield Council, Pocket Living
Related reading: Student loans cost aspiring buyers £2,000 a year in deposit savings
