Right to Buy to be made available to housing association tenants

The Prime Minister Boris Johnson has confirmed that the Right to Buy scheme is to be extended to housing association tenants.

Currently, tenants in council homes are eligible to buy their homes at a discounted price of up to 70 off the market value dependent on how long they have lived there. However, the scheme is less generous for those in homes owned by housing associations.

The government estimates that extending the scheme would mean an extra 2.5 million tenants would gain the right to buy.

The government also announced an independent review of access to mortgage finance for first-time buyers, with the aim of making it easier by widening access to low-cost, low-deposit finance such as 95 per cent mortgages. This will be the first comprehensive review of the mortgage market for a decade.

It also plans to change the rules to incentivise those who are claiming Universal Credit to save for a deposit. Currently, welfare rules taper the amount of Universal Credit received when the claimant’s savings exceed £6,000, and it stops entirely when savings exceed £16,000.

The government has committed to exempting Lifetime ISA savings from these rules – meaning deposit saving will not impact Universal Credit payments.

Responding to the announcements, Cllr David Renard, housing spokesperson for the Local Government Association, said:

“Owning your own home is an important step for many people, and an extension of the Right to Buy scheme to housing associations tenants could enable many more to get on the housing ladder.

“However, measures that support homeownership should not lead to any reduction in the overall number of affordable social rented homes. Any houses sold must be replaced quickly, in the same local authority area and on a like for like basis. Equally, the cost of discounts must not be funded from the sale of council housing stock, nor be met from existing government funding commitments for delivery of additional affordable homes.

“The Right to Buy scheme for council tenants also needs urgent reform and councils need to be able to keep 100 per cent of receipts and set discounts locally. The number of new council homes being built is not able to keep pace with those sold under Right to Buy, and the discounts available, along with the funds that have to be returned to Treasury, are leaving councils with less and less resources to catch up.

“With over 1.1 million households currently on social housing waiting lists, any loss of social rented housing would risk pushing more families into the private rented sector, as well as driving up housing benefit spending and rents and exacerbating our homelessness crisis at a time of an escalating cost of living crisis. We need to be urgently increasing, not reducing the supply of affordable social homes.”

Read the Prime Minister's Housing speech