Mortgages 

Housing Association tenants may be given right to buy

Housing Association tenants may be given right to buy

Housing association tenants could be given the right to buy their properties, under plans by the Conservative Party to extend the right-to-buy scheme.

When asked if this was part of the Conservative Party’s election campaign, a spokesman for work and pensions secretary Iain Duncan Smith said: “We will set out our manifesto policies at the appropriate time.”

The move would give up to 2.5m housing association tenants the ability to own their homes.

Kate Davies, chief executive of Notting Hill Housing Group, said the proposal “would need to be backed by significant public funds”.

In 1980, more than 1.5m council house tenants were given the right to buy the properties they lived in under prime minister Margaret Thatcher.

Currently, housing association tenants only qualify for limited discounts on the property’s market value. These range between £9,000 and £16,000 depending on the location. The property must also have been acquired by the association after 1997.

In contrast, council house tenants can get discounts of up to £77,000 in England, and £102,700 in London.

In 2008, the Centre for Social Justice, the think-tank set up by Mr Duncan Smith in 2004, proposed in a study that housing association tenants be offered a discount of up to 30 per cent on the value of a property.

Adviser View

Paul Dorward, mortgage adviser at South Yorkshire-based PAD Financial, said: “It depends a lot on the housing association, and if they would be happy to sell, but if it offers an opportunity for tenants to buy, then great. However, if tenants become owner occupiers then the housing associations have to find alternative ways to provide social housing.

“Depending on the discount, the scheme would also help people in terms of the loan-to-value, and may give enough security for a lender to offer a decent mortgage.”

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