The first Conservative only Queen’s Speech in nearly two decades brings with it the news that the Conservative Government are to extend the Right to Buy Scheme.
First introduced in the 1980’s, the scheme has allowed council house tenants to buy their properties at a discount and now the Conservative Government want to extend the scheme to 1.3 million housing association tenants as well. When the Housing Bill becomes law, as outlined in the Queens Speech, housing association tenants will acquire the same rights as council tenants to buy their properties at a discount.
So, who is eligible for this scheme? Firstly, you will need to have lived at the property for at least three years and you will also need to be able to fund the purchase after the discount has been taken into account.
If you are eligible for the scheme, the discounts start at 35% on a house and 50% on a flat. In cash this discount could be up to £77,900.00 across England!
There has been much talk on how this extension is to be funded and differing opinions on its’ effects.
The government proposes to require Local Authorities to sell off their most valuable council houses whenever they become vacant and then build replacement homes with the money raised.
A Right to Build in the Bill will also help increase housing supply and diversify the housing sector by giving people the right to be allocated land with planning permission for allows them to self-build, or commission a local builder to build a home.
In a recent blog for Shelter, John Bibby, discusses the government’s Right to Buy extension and what it means for the housing market.
He says: "You could call it selling off two affordable homes for the price of one. And at a time when the country has a massive and recognised shortage of affordable homes, stepping up sales of the existing limited supply, to subsidise further sales, might seem like a strange response".
However the new Communities Secretary Greg Clark has insisted that the plans for the right to buy extension will not lead to a fall in the overall provision of social housing in England. He says;
"Every housing association property that is sold will be replaced one for one for a new property, so it is not only allowing people to meet their housing aspiration, but to increase the housing stock aswell".
Whether the right to buy extension is a good decision for Britain’s housing market remains to be seen and this is a subject that is sure to continue for a long time coming.