Right to buy: How will Boris Johnson’s scheme work?

Right to buy: Boris Johnson will reveal plans to let people to use their housing benefit to help get on the property ladder. Photo: PA

Plans to help lower-paid workers use housing benefit cash to buy a home are set to be announced by UK prime minister Boris Johnson as he vows to turn renters into homeowners.

Levelling up secretary Michael Gove said the measure, as well as a relaunch of the right to buy scheme, would encourage more people to purchase their own property.

Both policies will be formally unveiled by Johnson at a speech in Blackpool where the prime minister is set to argue that the housing benefit money would be better spent helping people buy their own home than on paying their rent — in a policy dubbed “benefits to bricks” by one minister.

Confirming the plan, Gove told Sky News: “One of the things we’re looking at is a way people can save explicitly for home ownership … We are looking specifically at a saving vehicle in order that people [on benefits] can save for that deposit.”

Read more: Fewer house hunters as UK property prices set to rise even further

But the cabinet minister suggested that benefit recipients in London and the south-east may still struggle to get on the property ladder.

“There will be many people in the north, Midlands and the south-west who will be well able to get on the property ladder using the amount they earn and receive in universal credit,” Gove told LBC.

Speaking in Lancashire, Johnson will commit to “reforms to help people cut costs in every area of household expenditure” over the coming weeks.

He will argue that £30bn ($37.6bn) in housing benefit that currently goes towards rent could help people secure and pay for mortgages, according to The Times, which first reported the plan.

The idea has raised questions on how claimants can save for a deposit as people only qualify for housing benefit if they have less than £16,000 in savings.

Gove suggested the £16,000 limit would not apply. “We’re looking at using some of the existing savings vehicles we have so that people can specially save money in order to qualify for a deposit … and have those savings disregarded when it comes to benefit claims,” he told TalkTV.

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But the newspaper said his separate desire to give millions of tenants the ability to pay for housing association properties at discounts of up to 70% is likely to be limited to a series of pilots for now, without additional government funding.

Gove said there would be a cap on the number of people who can benefit from the expansion of the scheme but was unable to put a figure on it.

He told Sky News: “That’s something I will be discussing with housing associations.”

Gove also claimed on ITV’s Good Morning Britain that social housing would be produced “instantly” to replace homes bought by low-earners.

Read more: UK house prices hit record £289,099 but market set to cool

He added: “We want to be in a position where we’re increasing social homes … and ensuring that in the stock of social homes as people move from renting to ownership so that we replace those numbers as well.”

The speech takes place during a cost of living crisis, underlined by figures showing the average cost of a full tank for a 55-litre family car has hit £100.

In his speech, Johnson is set to say: “We have the tools we need to get on top of rising prices.

“The global headwinds are strong, but our engines are stronger.

“And, while it’s not going to be quick or easy, you can be confident that things will get better, that we will emerge from this a strong country with a healthy economy.”