Last week, the British government announced an extension of the Right to Buy scheme to around 2.5 million housing association tenants, with the Prime Minister criticising some housing associations for their ‘scandalous indifference’ to tenants. The Right to Buy policy was originally introduced in the 1980s, allowing social housing tenants to buy their council homes at discounts of up to 70% off the market value. It is estimated that more than two million tenants have taken advantage of the scheme to become homeowners since then.
The new Right to Buy scheme will allow housing association tenants to buy their properties at similarly discounted prices, rising to a maximum of 70% depending on how long they have lived there. The government intends to instigate a one-for-one policy, with one new social home built for every home sold through the scheme, in order to maintain the nation’s social housing stock at the same level. Housing association tenants will also be able to use welfare payments to help secure mortgages and meet their monthly payments, with the government highlighting the fact that roughly £30 billion in housing benefit is currently used to pay rent, a sum that would be better spent on helping people buy their own homes.
In the coming months, the government is expected to work closely with the housing association sector to get the new Right to Buy scheme up and running. In parallel, an independent review of the mortgage lending market will be launched, focusing on the availability of and access to cheaper mortgage finance for first-time buyers, including 95% mortgages. With house prices at all-time highs, deposit requirements are currently beyond what many prospective homeowners, particularly young people, can afford, despite the fact that an estimated 50% of renters could afford the monthly cost of a mortgage. The revival of Right to Buy could therefore be crucial in meeting the government’s ultimate aim of turning ‘generation rent’ into ‘generation buy’.
Our specialist conveyancing solicitors can advise on and assist with any aspect of the Right to Buy scheme:
We also have a housing law team with expertise in taking legal action against housing associations for disrepair and personal injury: