What is the Right to Buy scheme and could it help me buy a house?
Right to Buy #RighttoBuy
BORIS Johnson is set to announce confirmation of plans to give housing association property tenants the right to buy their homes.
The prime minister is due to announce the shake-up in Lancashire today as he vows to finally turn struggling renters into proud homeowners.
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Boris Johnson is set to announce confirmation of plans to give housing association property tenants the right to buy their homesCredit: PA
It would be an extension of the Right to Buy scheme, which was introduced by Margaret Thatcher in the 1980s and was originally intended for council home tenants.
It could help a generation of first-time buyers locked out of the housing market because of rocketing prices get on the property ladder.
Meanwhile, a new generation of “posh prefabs” will be rolled out across the country to get more renters into high quality but cheap DIY homes.
It comes after Johnson won a confidence vote on Monday night as 148 Tory rebels voted to oust him from his seat.
Here’s what you need to know:
What is the right to buy scheme?
The right to buy scheme offers council tenants the chance to buy their home at a discount.
Under current rules, you can apply to buy your council if:
You can get a discount on the market value of your home when you buy it if you qualify for Right to Buy.
The maximum discount is £87,200 across England and £116,200 in London boroughs.
It increases each year in April in line with the consumer price index (CPI) inflation – the price of a weighted average market basket of consumer goods and services purchased by households.
The discount is based on how long you’ve been a tenant, the type of property you are buying and the value of your home, so you’ll be rewarded for having stayed a property for longer.
However, you might get a smaller discount if you’ve used Right to Buy in the past.
When was the scheme first introduced?
Millions of council tenants were given a discount to buy their home when the Right to Buy scheme was launched by Margaret Thatcher’s conservative government in 1980.
It was one of the first major reforms introduced by Thatcher, who came to power the year before, and was a popular policy.
So much so, Labour abandoned its opposition to the policy in 1985.
In 1999, the Labour government reduced the maximum discount from £50,000 to £38,000.
By March 2003 deputy prime minister John Prescott announced the maximum discount was to be cut in 41 local authority areas in London and the South East.
What’s happening now?
Previously, the Right to Buy scheme was only available to council home tenants but Johnson is set to extend it to housing association tenants.
The plans could help “generation rent” get onto the housing market with house prices at sky high levels.
House prices have reached a series of record highs over the past year.
According to the Office for National Statistics, the average UK home now costs an eye-watering £278,000 – up almost 10% over the past year.
The extension of the scheme would also benefit traditional Red Wall voters who flocked to the Tory party in the last general election.
Could it help me buy a house?
Yes – as long as you’re eligible.
Under the current Right to Buy scheme, in a home you get a 35% discount on your council home if you’ve been a public sector tenant for between three to five years.
After five years, the discount increase by 1% for each extra year you’ve been a public sector tenant.
However, the maximum it can increase to is 70%, or the £87,200 across England and £116,200 in London boroughs.
If you live in a flat, you get a 50% discount if you’ve been a public sector tenant for between three and five years.
After five years, the discount goes up to 2%, as opposed to one, for each extra year you’ve been a public sector tenant.
But, as is the case with owning a home, this discount can only go up to a maximum of 70% of £87,200 across England and £116,200 in London boroughs.
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