The Right to Buy scheme will be extended under the current government, it has been announced.
The Right to Buy scheme was brought in by Margaret Thatcher in the 1980s, and was somewhat controversial. Today’s Conservative government are going to extend this scheme to more people in an attempt to alleviate the housing issue.
The Right to Buy scheme was available to council tenants who had lived in their houses for a minimum period of time. It let them purchase the house off of the council at a discount, in an attempt to allow more people to become home owners, although it meant that the council lost property from its portfolio, controversially making less social housing available for others in need.
The scheme is now to be extended to 1.3 million people who are housing association tenants.
The scheme has been rejected by the Scottish and Welsh governments, who want to preserve publicly owned housing stock, reflecting the ever more fractured political stances of the different domains of the UK.
In fact, the government in Wales is reportedly planning to abolish Right to Buy entirely, and Scotland will have it phased out by August 2016.
People who have been housing association tenants for three years will be eligible in England for the scheme. This equates to an estimated 500,000 people already eligible for discounts, and the possibility to be eligible for discounts to the remaining 800,000.
There will be caps on the discount of £77,900 outside of London, and £103,900 inside the capital, but otherwise the discounts will reach up to 70%, it would seem, starting at 35%.
The scheme would, in theory, use the payouts to fund more social housing to be built, and therefore would increase the amount of homes available. However, only 46% of homes sold off since 2012 have been replaced by new ones, despite it being a requirement that council houses be replaced with new builds when sold, according to the National Housing Federation (NHF). This is mainly to do with the fact councils find it hard to find enough land to build on.
The Institute for Fiscal Studies has also commented, stating that the scheme would cost “billions of pounds” and that it would “worsen the UK’s underlying public finance position,” the BBC reported.
The Conservative housing schemes have always been a bit controversial, including the Help to Buy scheme, and will very likely continue to be controversial. But the real tell will be what state the housing market is in come the next election.