Prime Minister David Cameron has announced the intention of the labour party to extend the Right to Buy scheme which was first introduced by Margaret Thatcher back in 1979.
It would allow 1.3 million people, who are housing association tenants, the opportunity to purchase their homes.
Currently the existing scheme lets council tenants purchase their home at a discounted price, potentially receiving as much as 70 per cent off the price, up until the maximum limit of £77,000 (and £102,700 in London). It is expected that 15,000 properties will be made available each year through the right to buy scheme.
Councils will be obliged to sell the most expensive properties when they become empty, to be replaced with affordable social homes, in order to finance the right to buy scheme. The Conservative party stressed that nobody would be forced from their home under the scheme.
However, there has been criticism, with the National Housing Federation saying that the scheme may cost as much as £5.8 billion in compensation for housing associations, which are not for profit. This would be due to the government ‘forcing’ them to sell properties at below-market rates. They highlighted that this money could instead be used to finance more homes.
Ruth Davison, of the National Housing Federation, and also a member of the Labour party, said: “We are independent organisations and charities. You can no more force a housing association to sell their assets at less than they’re worth than you can force Tesco, or even Cancer Research.”
Each political party has been announcing their housing plans in the run up to the general election, with the Liberal Democrats promoting Rent to Own, and Labour looking to use Help to Buy ISAs .