The Prime Minister announced government plans for the extension of the Right to Buy to people living in properties owned by housing associations. This extension will make homeownership possible for millions of people currently renting from these not-for-profit bodies.
Two and a half million tenants will now be eligible to buy their homes with the government promising to build a new social home for each one that is sold.
Currently, tenants living in council properties can get a discount of up to 70% of the market value of their home dependent on how long they have lived there. However, for housing associations, the discount is limited to a maximum of £16,000.
What is the Right to Buy scheme?
The Right to Buy scheme has been around since the 1980s and it allows – at the moment -most council tenants to buy their council homes at a discount.
To apply to buy your council home at a discounted price you must prove the following:
- it’s your only or main home
- it’s self-contained
- you’re a secure tenant
- you’ve had a public sector landlord (for example, a council, housing association or NHS trust) for 3 years
The benefits of extending the Right to Buy scheme
Extending the Right to Buy scheme could help up to 2.5 million tenants buy their homes. By becoming homeowners, they will be able to add value to their homes by renovating and improving them as they please.
The scheme can also be a huge benefit for taxpayers by being affordable within existing spending plans, and with the promised one-for-one replacement of each social house sold. The Prime Minister stated:
“For four decades it has been possible for council home tenants to use a discount to buy the property they live in. Over that time almost two million people have been helped into home ownership.
“They have switched identities and psychology, from being dependent on the state for every repair – from damp-proofing to a new front door – to being in charge of their own family home, able to make improvements and add value as they please.”
Once the Government overcomes some political and budgeting challenges, we believe this extension could be an exciting prospect that will make homeownership widely available and positively change the housing market. What are your thoughts on the Right to Buy extension? Let us know on Facebook.
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