The Conservative Party’s manifesto pledge to extend the Right to Buy scheme was confirmed in yesterday’s Housing Bill.
The Bill was part of the Queen’s Speech which outlined the new government’s legislative plans for the coming year.
The Right to Buy Scheme – which allows social housing tenants to buy their home at a discount – will be extended to over 1.3 million housing association tenants.
The Government has pledged that receipts from selling an owner’s current property will help housing associations to build replacement affordable homes on a one-for-one basis.
To fund the policy, local authorities will be required to dispose of high-value vacant council houses and any remaining cash will be invested in a new Brownfield Regeneration Fund to increase the supply of new housing.
Before the election, there was a mixed reaction to the Right to Buy scheme among the UK’s property professionals.
In response to yesterday’s announcement, Stephen Johnson, Managing Director of Commercial Mortgages at Shawbrook Bank, says he sees the move to extend the Right to Buy scheme as part of a wider decline in the supply of social housing available to tenants.
“By encouraging tenants of Housing Associations to buy their homes, the government is increasing the reliance of remaining social tenants on availability within the private rental sector. Demand for the private rental sector is therefore the catalyst for the growth of the housing market moving forward,” he says.
Jon White, UK Managing Director of the global construction consultancy Turner & Townsend, says that the ‘turbocharging’ of Right to Buy could dramatically boost levels of home ownership in Britain.
“How much it will do to solve the housing crisis is another matter,” he says. “Its success will hang on its ability to spur the construction of new homes.”
Adrian Gill, director of Your Move and Reeds Rains estate agents, adds: “The Right to Buy extension sounds good on paper – but we’ve yet to see how this will translate in practice, and the reality is that authorities will have to sell off existing stock first before they can fund and deliver this new promised land of affordable properties.”