On the 7th October, David Cameron announced an historic new agreement with housing associations and the National Housing Federation that is set to extend the Right to Buy Scheme to 1.3 million more families.
The Prime Minister explains:
â€œSome people said this would be impossible and that housing associations would never stand for it. Today we have secured a deal with housing associations to give their tenants the Right to Buy their homeâ€¦That will mean the first tenants can start to buy their homes from next year.â€
The Right to Buy is a scheme that allows families in social properties to become homeowners, and has already helped around 2 million families realise their dreams since its introduction under Thatcher.
By recycling the funds raised by selling off the properties towards replacement affordable properties, this agreement sets out to not only increase home ownership but also help those who need a new affordable house, thus increasing overall housing supply.
Communities Secretary, Greg Clarke says:
â€œWeâ€™re determined to ensure that home ownership is seen as a reasonable aspiration for working peopleâ€¦Todayâ€™s historic agreement with housing associations and the National Housing Federation will extend that offer even more widely, while at the same time delivering thousands of new affordable homes across the countryâ€
Under the new agreement, every housing association tenant would have the right to purchase a home at Right to Buy level discounts (subject to the Right to Buy eligibility requirements). It is assumed that housing associations would sell the tenant the property in which they currently live.
Compensation would then be paid to the Housing Association by the government to reflect the discount that was offered to the tenant. The sales receipt would be kept by the housing association so that they can reinvest towards the delivery of new homes.
Housing associations would use sales proceeds to deliver new supply and would have flexibility to replace rented homes with other tenures such as shared ownership.
Chief Executive of the National Housing Federation, David Orr said of the agreement:
â€œThis is a great offer for housing association tenants. It is also a great offer for the country, as our proposal means homes sold will be replaced, delivering an overall increase in housing supply.
“This is an ambitious sector that last year built more than one in three of the countryâ€™s homes, matching each pound of taxpayersâ€™ money with Â£6 of its own. We will build more.â€
The Right to Buy is just one part of the Governmentâ€™s wider programme to increase overall home ownership, with other schemes including the Help to Buy, Starter Homes, Right to Build and planning reforms to get more homes built on brownfield land.
It certainly seems as if there are enough schemes in place to address the mounting problems of home ownership and housing supply, but the question remains â€“ how effective are they? Are they papering over the cracks, or providing a viable solution?
BT www.propertysurveying.co.uk 09.10.15