What is the Right to Buy scheme and could it help me buy a house?
BORIS Johnson has confirmed plans to give housing association property tenants the right to buy their homes.
The prime minister announced the shake-up in Lancashire yesterday as he vowed to finally turn struggling renters into proud homeowners.
It is an extension of the Right to Buy scheme, which was introduced by Margaret Thatcher in the 1980s and originally intended for council home tenants.
The scheme will aim to help a generation of first-time buyers locked out of the housing market because of rocketing prices get on the property ladder.
Meanwhile, a new generation of "posh prefabs" will be rolled out across the country to get more renters into high quality but cheap DIY homes.
It comes after Johnson won a confidence vote on Monday night as 148 Tory rebels voted to oust him from his seat.
Here's what you need to know:
Read more on Property
What is the right to buy scheme?
The right to buy scheme offers council tenants the chance to buy their home at a discount.
Under current rules, you can apply to buy your council home if:
- It's your only or main home
- It's self-contained
- You're a secure tenant, which means you can normally live in a property for the rest of your life
- You've had a public sector landlord for three years, although it does not have to be three years in a row
You can get a discount on the market value of your home when you buy it if you qualify for Right to Buy.
Most read in Money
The maximum discount is £87,200 across England and £116,200 in London boroughs.
It increases each year in April in line with the consumer price index (CPI) inflation - the price of a weighted average market basket of consumer goods and services purchased by households.
The discount is based on how long you've been a tenant, the type of property you are buying and the value of your home, so you'll be rewarded for having stayed at a property for longer.
However, you might get a smaller discount if you’ve used Right to Buy in the past.
When was the scheme first introduced?
Millions of council tenants were given a discount to buy their home when the Right to Buy scheme was launched by Margaret Thatcher's conservative government in 1980.
It was one of the first major reforms introduced by Thatcher, who came to power the year before, and was a popular policy.
So much so, Labour abandoned its opposition to the policy in 1985.
In 1999, the Labour government reduced the maximum discount from £50,000 to £38,000.
By March 2003 deputy prime minister John Prescott announced the maximum discount was to be cut in 41 local authority areas in London and the South East.
What's happening now?
Previously, the Right to Buy scheme was only available to council home tenants but Johnson is set to extend it to housing association tenants.
The plans could help "generation rent" get onto the housing market with house prices at sky high levels.
House prices have reached a series of record highs over the past year.
According to the Office for National Statistics, the average UK home now costs an eye-watering £278,000 - up almost 10% over the past year.
The extension of the scheme would also benefit traditional Red Wall voters who flocked to the Tory party in the last general election.
Could it help me buy a house?
Yes - as long as you're eligible.
Under the current Right to Buy scheme, in a home you get a 35% discount on your council home if you've been a public sector tenant for between three to five years.
After five years, the discount increase by 1% for each extra year you've been a public sector tenant.
However, the maximum it can increase to is 70%, or the £87,200 across England and £116,200 in London boroughs.
If you live in a flat, you get a 50% discount if you've been a public sector tenant for between three and five years.
READ MORE SUN STORIES
After five years, the discount goes up to 2%, as opposed to one, for each extra year you've been a public sector tenant.
But, as is the case with owning a home, this discount can only go up to a maximum of 70% of £87,200 across England and £116,200 in London boroughs.
We pay for your stories!
Do you have a story for The Sun Online Money team?
Email us at [email protected]