The Prime Minister is currently drafting up plans that could help up to 2.5 million council tenants buy their homes at a discounted price in a move that strongly echoes Margaret Thatcher’s ‘Right To Buy’ scheme.
Boris Johnson aims to get the scheme up and running across the UK, though will be mainly focusing on the Midlands and the North. Through this extension of the ‘Right To Buy’ scheme, renters will be able to purchase their property from housing associates at a discounted price.
A housing association is a private, not-for-profit organisation in the UK or Ireland that provides low-cost, “social housing”.
If the scheme is successful it can drive up the proportion of property ownership in the country.
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The revival of the scheme was first brought up by David Cameron in 2015, who claimed right to buy would help get ‘generation rent’ onto the property ladder. Cameron included the scheme in his 2015 manifesto and was piloted by Theresa May in the Midlands in 2018. Boris Johnson said he would consider new pilots in the 2019 manifesto.
Margaret Thatcher’s original ‘Right To Buy’ scheme was incredibly popular and profitable for those who took part in it. The scheme focused on council houses and saw 2.6 million homes sold under it.
However, the ‘Right To Buy’ scheme also had a negative impact on the number of council houses available for those in poverty and facing homelessness. It meant that these houses were not as widely available as they had once been.
Furthermore, out of the 2.6 million homes that were sold, less than 5% have ever been replaced, leading to a huge house availability crisis.
Criticism Of The Scheme
Housing experts have criticised the Prime Ministers’ plan for the revival and called for an increase in home building instead of selling off affordable homes during a housing crisis.
According to Shelter, the housing and homelessness charity, over 1 million households across England are on social housing waiting lists. They went on to say that in the last three months of 2021, just under 34,000 households in England became homeless. Within those 34,000 households, 8,000 were families with children.
The chief executive of Shelter, Polly Neate, said that in a period where the cost of living is rocketing, the government “should be building more social homes, so we have more, not less”. She said that this move could risk depleting the already limited housing stock.
She went on to say “There could not be a worse time to sell off what remains of our last truly affordable social homes.
“The living cost crisis means more people are on the brink of homelessness than homeownership ..right to buy has already torn a massive hole in our social housing stock as less than 5% of the homes sold off have ever been replaced. These half-baked plans have been tried before and they’ve failed.”
Lisa Nandy, the shadow housing secretary, said the idea was “desperate” and evidence of a “tired government”.
She went on to say that: “Millions of families in the private rented sector with low savings and facing sky-high costs and rising bills, need far more ambitious plans to help them buy their own home.”
Rising Renting Cost
Labour conducted research that found the cost of renting has overtaken wages in every region of England since the Conservative party took power.
The cost of renting is not the only statistic that has risen, with the average age of Britons buying their own home has reached 34 as of this year, compared with 31 in 2002 and 29 in the 1990s according to research conducted by Which?.
In 1980, a typical house in the UK cost £24,000 and increased on average by 7% a year for nearly four decades.
According to Labour, the average private rents in England had increased by 29% between 2010 and last year, whilst CPI inflation over the period was 19%. Over in the east of England rent rose by 43%.
Whether or not banks should take into account taxpayer money received by those who claim housing benefits when they are seeking a mortgage is being considered by ministers.
The government is also reportedly considering dropping the number of homes that developers build that are affordable in an effort to help with the increase in the housing stock.
Instead, developers would pay into an infrastructure fund that councils could then use to fund their own projects.
Cost Of Living Crisis
Inflation in the UK is at its highest rate in 30 years having risen to 7%. People across the UK are having to carefully consider budgets with fuel, food, and energy prices continuing to rise.
The cost-of-living crisis has been blamed for the rise in poverty, with people being left with the choice of deciding whether they can afford to heat their homes or whether to eat instead.
The Office of Budget Responsibility has predicted that factors such as the war in Ukraine could push inflation even further to 8.7% making it the highest it has ever been in 40-years.
What Does This Mean For The Future?
If the revival of the ‘Right To Buy’ scheme goes ahead as planned, it could spell good news not only for potential new homeowners but also for the Conservative party themselves. A large demographic of the Conservative party is homeowning adults, and by helping ‘generation rent’ onto the property ladder, it could be a great way to secure votes ahead of elections on Thursday.
However, the knock-on effect this could have on the affordable house market is sizeable and if measures aren’t taken to avoid the mistakes of the past, there could once again be a lack of availability for council housing.
This sums up everything you need to know about the ‘Right To Buy’ revival, if you have any questions, queries, or any insight into the ‘Right To Buy’ revival, please don’t hesitate to get in touch!