Section: Right to Buy
Revamped Right to Buy Launched
The Prime Minister and Housing Minister Grant Shapps launched the revamped Right to Buy scheme, aimed at encouraging more council tenants to become home owners.
The new scheme aims to reverse years of declining discounts for tenants, which made Right to Buy meaningless in many parts of the country. Fewer than 3,700 sales were made last year compared to a peak of 84,000 less than 10 years ago.
The implications of the changes are:
- The revamped Right to Buy scheme will give tenants a larger discount on the market value of their home. The longer they have been a tenant, the bigger discount they get, up to a maximum cap of £75,000.
- For a house, tenants can get a discount of 35% on their current home after five years as a public sector tenant. For each extra year, they get an additional 1% discount up to a maximum of 60%.
- For flats, tenants can get a discount of 50% after a five-year tenancy. For each extra year, they get an additional 2% discount up to a maximum of 70%.
- Whatever percentage they are eligible for, it cannot exceed £75,000. This arrangement will result in far higher potential discounts for tenants across the country than before.
- Whilst applicants must have been public sector tenants for five years before they can qualify to purchase their home through Right to Buy, this tenancy can be in their current home or in a previous one - even with a different landlord.
The replacement of additional homes bought through Right to Buy will be funded using the same model as for the Affordable Homes programme. Under this approach, social landlords can meet the costs of new homes from borrowing against the future rental income, contributing from their own resources, including land, and grant funding from the Government.
For the Right to Buy replacement scheme, receipts will substitute for grant funding for up to 30% of total costs.
