Right to Buy Scheme

by Mark Johnston

Most people aspire to won their own home and it now seems that the government wants to support people with that aspiration as long as they can sustain home ownership.

The right to buy scheme is targeted at long standing public tenants, therefore people can apply for the scheme if they have been a council or public sector tenant for up to 5 years, although it does not have to be 5 years in a row.

‘preserved’ right to buy works in a similar way to right to buy but it applies to those tenants who would not normally qualify for right to buy. For example, if the council sold the property to another landlord, e.g. a housing association, while they were renting it.

Those who definitely do not qualify to buy through this particular scheme would be:

–          if the property is not their main home

–          if the tenant is declared bankrupt

–          if the tenant owes creditors

If a tenant does qualify for the scheme, they can get a discount on the market value of the property when they buy it. The discount is based on how long they have been a tenant, where they live and also the type of property they are buying, whether it is a house or a flat.

The discount offered also increases in proportion to the years that rent has been paid, with a maximum discount ranging from £16,000 to £38,000, although this also depends on the local authority.

The housing minister, Grant Shapps has said “restrictions on discounts over the past few years made right to buy meaningless in many places, with fewer than 3,700 sales last year compared with a peak of 84,000 less than 10 years ago”.

Under a government plan to revitalise the right to buy scheme they have announced that they are to increase the maximum discount to £50,000 in England and Wales. This is intended to make it easier for some of the 2 million tenants of social housing to buy the property they live in.

Campbell Robb, the chief executive of housing charity Shelter, suggested that “these levels of discounts will be extremely attractive, but it is vital that any new scheme includes rigorous affordability checks to make sure people can truly afford to buy their home and maintain it in to the future”.

The Prime Minister is hopeful that these new discounts will once again make the scheme attractive again and also help to rejuvenate the housing stock.

The money raised from the right to buy scheme will be used in part to help fund more affordable housing, basically meaning that for every home bought through the scheme a new affordable home will be built.

Over the years, the right to buy scheme has been extended to give more people the chance to become homeowners. Research has shown that this has had a positive effect on the wider community and resulted in many council estates becoming much more stable.

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