Boost for social tenants as right to buy discounts increase

The Government wants to encourage more home ownership by increasing the discounts available under the Right to Buy scheme.

The discount cap will be raised to £50,000, which will treble the money available in some parts of the country to help social tenants buy their home.

Ministers say that every home sold in this way will be replaced by a new affordable home on a one for one basis.

The Right to Buy scheme was introduced more than 30 years ago and enabled hundreds of thousands of tenants to buy their homes. However, restrictions on discounts in recent years made the scheme meaningless, according to the Housing Minister Grant Shapps.

There were only 3,700 sales in 2010 compared with 84,000 a decade earlier.

It’s hoped that raising the discount cap to £50,000 will once again boost social mobility and transform housing estates.

The discounts available vary depending on the cost of the property and how long the tenant has lived there.

A Government statement gives some examples of how the new discounts will apply.

“Someone in the West Midlands who had been a tenant for eight years on a household income of £20,000 could buy their £90,000 flat with a discount of £50,000 compared to £26,000 previously - effectively doubling their discount.

“In London, a tenant for five years buying a flat worth £160,000 would also receive a discount of £50,000 - more than three times the previous cap of £16,000.”

Grant Shapps said: “We are also determined to maintain the number of affordable homes for rent - so for the first time, every additional home that is sold will be replaced by a new affordable home on a one-for-one basis.

“The new homes for affordable rent will help get the nation building again, and help councils meet housing need."    

The Government will now consult with affected parties including landlords, lenders and tenant organisations before implementing the proposals.

We shall keep clients informed of developments.

Please contact  Madelaine Henwood if you would like more information about the issues raised in this article or any aspect of buying and selling a property.