Housing association tenants are to be given the right to buy their homes, Prime Minister Boris Johnson has announced.
Currently, council tenants are eligible to buy their homes at up to 70 below market value. Over two million have done so over the last 40 years.
Now housing association tenants are to be given similar rights in a scheme yet to be designed. There will be a commitment to build replacement social homes for each one sold.
There is also to be an independent review of access to mortgage finance for first-time buyers, with the aim of making it easier for this group to access low-cost, low-deposit finance.
‘Currently, soaring house prices, stringent mortgage lending restrictions and high deposit requirements are hampering the ambition of many young people who want to own their own home. Over 50 per cent of today’s renters could afford the monthly cost of a mortgage but various constraints mean only 6 per cent could immediately access a typical first-time buyer mortgage’, said the Prime Minister.
This will be the first comprehensive review of the mortgage market for a decade, seeking bold and innovative steps that Government and industry can take to support more first-time buyers into homeownership, he said.
‘We have a ludicrous situation whereby plenty of younger people could afford to make monthly mortgage payments – they’re earning enough to cover astronomical rent bills – but the ever-spiralling price of a house or flat has so inflated deposit requirements that saving even just 10 per cent is a wholly unrealistic proposition for them’.
The Prime Minister also promised to change social welfare rules so that recipients will be able to use their housing benefits to pay for a mortgage, ‘rather than automatically going directly to private landlords and housing associations’.
Meanwhile Levelling Up Secretary Michael Gove said that another rule change would allow Universal Credit recipients to save for a deposit using a Lifetime ISA without the sum of their savings impacting on their benefits entitlement.
The plans were dubbed ‘baffling, unworkable, and a dangerous gimmick’, by homeless charity Shelter’s chief executive Polly Neater.
‘Hatching reckless plans to extend Right to Buy will put our rapidly shrinking supply of social homes at even greater risk’, she said.