How the new deal with Right to Buy will help you afford a home in the UK

There are many problems facing young people in the UK. One such problem is the rising cost of housing – a problem which Prime Minister David Cameron has …

There are many problems facing young people in the UK. One such problem is the rising cost of housing – a problem which Prime Minister David Cameron has addressed with his flagship Right to Buy policy. In a bid to help first time buyers get on the property ladder in face of these rising house prices, David Cameron recently announced an extension to the Right to Buy scheme. This is possible due to a new deal being struck with the National Housing Federation (NHF), helping an extra 13 million people in the UK on their way towards their goal of owning their own home.

The voluntary deal will allow housing associations to offer their tenants the option to buy to their current home at a discount. This discount will be covered by the Government, which promises fair compensation (and sales receipts) to the housing associations in order to fund new housing in the future.

While this will give every housing association tenant in the UK the right to buy their home at a discount, the housing associations will reserve the right to not sell certain properties. This would be at their own discretion, and would generally be houses which have been adapted and houses in rural areas. In these cases, tenants would be able to use their Right to Buy discount on “alternative properties”.

“Some people said this would be impossible and that housing associations would never stand for it. Today we have secured a deal with housing associations to give their tenants the right to buy their home,” the Prime Minister said during his party speech announcing the extension to the current Right to Buy scheme. “That will mean the first tenants can start to buy their homes from next year.”

Greg Clark, the Government’s Communities Secretary who struck the deal also commented on the scheme, saying: “We’re determined to ensure that home ownership is seen as a reasonable aspiration for working people. Right to Buy is a key part of this, offering a helping hand to millions of people who would have no hope of buying their own home without it.”

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The previous version of the Government’s Right to Buy scheme has already helped around 2 million families in the UK purchase their home from housing associations across the country. This extension to the scheme works in much the same way as it did before, working alongside Help to Buy loans – Government loans on up to 20 per cent of the value of the home.

You can also get homeowner loans if you already own a property because Help to Buy loans are exclusive to first-time buyers this can be a great way to invest in a second property with a minimum risk to your existing assets. Loan Locator offers homeowners loans of up to £250,000 click here to find out more.

There is also a set of planning reforms going through Government at the moment to help get homes built on brownfield – areas of land previously used for industrial or commercial purposes. All in all, the plans to build more affordable housing in the UK seem to on a roll.

With such an ambitious scheme there will always be people who don’t approve of the plans. While the original plans for the Right to Buy scheme weren’t initially popular with these associations, the problems which arose seem to have been addressed. The current plans were put forward by the NHF to ensure a Right to Buy scheme which they believed would work for everyone.

David Orr, chief executive at the NHF, has welcomed the new plans, saying “This is a better and more flexible Right to Buy for residents, for housing associations and the nation’s housing supply. We made the offer on the back of sector-wide support for our proposal, which addresses our initial concerns around supply and independence.

“Because all of the funds from selling off properties will be recycled toward replacement affordable properties, the proposals will not only increase home ownership, but help those who need a new affordable property, and boost overall housing supply.”

All in all, the new deal with the Right to Buy scheme looks perfectly primed to help people in the UK afford to buy their home. Once passed, the full scope of these Government plans will allow for a cycle of events where current tenants can buy their homes for less, with the Government compensating housing associations in a way where further housing can be built. With each new home being bought and built, the British economy can move forwards, helping end the British housing crisis once and for all.



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