A new agreement has been struck with housing associations and the National Housing Federation that will extend Right to Buy to 1.3m more families, according to the government.
Under the agreement every housing association tenant would have the right to purchase a home at Right to Buy level discounts, subject to them meeting Right to Buy eligibility requirements.
According to Communities secretary Greg Clark the presumption is that housing associations would sell the tenant the property in which they live.
The government would compensate the housing association for the discount offered to the tenant, and housing associations would retain the sales receipt to enable them to reinvest in the provision of new homes.
Housing associations would use sales proceeds to provide new supply and would have flexibility to replace rented homes with other tenures such as shared ownership.
Reflecting the existing Right to Buy, housing associations will have the discretion not to sell a particular property in some limited circumstances, for example where a property is in a very rural area and the home could not be replaced, or where it is adapted for special needs tenants.
However, even in these exceptional cases, Mr Clark said housing associations would offer tenants the opportunity to use their discount to buy an alternative home from either their own or another association’s stock.
Mr Clark said: “We’re determined to ensure that home ownership is seen as a reasonable aspiration for working people.
“Right to Buy is a key part of this, offering a helping hand to millions of people who would have no hope of buying their own home without it.
National Housing Federation chief executive David Orr said this was a great offer for housing association tenants.
He said: “It is also a great offer for the country, as our proposal means homes sold will be replaced, delivering an overall increase in housing supply.
“This is an ambitious sector that last year built more than one in three of the country’s homes, matching each pound of taxpayers’ money with £6 of its own. We will build more.”
But John Cridland, CBI director-general, said while the government was making a step in the right direction to boost home ownership more work is needed.
He said: “The government must work closely with the business community to make sure the scheme works effectively for house-builders and prospective buyers alike.
“A healthy and vibrant housing market requires a mix of housing - private rental, homes to buy and social and affordable homes. And we need to go further if we are to deliver the 240,000 new homes a year required to meet demand, including building 10 new garden cities.”
To learn more about this subject, and earn CPD, read FTAdviser’s Guide to Right to Buy.
emma.hughes@ft.com
