Boosting property market via Right to Buy

17 Jun 2022

The UK Prime Minister Boris Johnson has vowed to extend the home-buying scheme known as Right to Buy in a move that he says is likely to boost Britain’s property market. Currently, tenants in council homes are eligible to buy their homes at a discounted price, up to 70% off the market value dependent on how long they have lived there. However, the scheme is less generous for those in homes owned by housing associations. Extending the scheme could benefit up to 2.5 million tenants who would gain the right to buy, freeing them up to become homeowners, and add value and make improvements to their home as they wish. The Government says it will work closely with the housing association sector on the design of the scheme. The Prime Minister says: “Just as no generation should be locked out of home ownership because of when they were born, so nobody should be barred from that same dream simply because of where they live now. For four decades it has been possible for council home tenants to use a discount to buy the property they live in. Over that time almost two million people have been helped into home ownership. He adds: “They have switched identities and psychology, from being dependent on the state for every repair – from damp-proofing to a new front door – to being in charge of their own family home, able to make improvements and add value as they please.”

‘Generation Rent’ to ‘Generation Buy’

In order to turn more ‘Generation Rent’ into ‘Generation Buy’ the government will also launch an independent review of access to mortgage finance for first-time buyers, with the aim of making it easier for this group by widening access to low-cost, low-deposit finance such as 95% mortgages. 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% of today’s renters, says government research, could afford the monthly cost of a mortgage but various constraints mean only 6% could immediately access a typical first-time buyer mortgage. Levelling Up Secretary Michael Gove MP said: “By extending Right to Buy and bringing forward the most comprehensive review of the mortgage market in decades, we are backing first-time buyers.”