Prime Minister David Cameron has this week pledged to extend the ‘Right to Buy’ scheme to all housing association tenants in Britain, should his Conservative party win next month’s General Election.
Cameron said: "The next Conservative government will extend the right-to-buy to all housing association tenants in this country – 1.3million extra families – a new generation given the security of a home of their own."
Originally introduced by Margaret Thatcher’s Conservative government in 1980, Right to Buy gave council tenants the opportunity to buy their homes at a discounted rate, and saw more than 1.5 million homes sold at vastly reduced prices.
The introduction of ‘Right to Buy’ is widely credited as winning the late Baroness Thatcher vital blue collar ‘swing’ votes, and retain her position as Prime Minister in 1983’s General Election.
However, in the subsequent thirty years, house prices are unrecognisable from before the introduction of the Right to Buy act, and many critics lay the blame firmly at the door of that Conservative government for the seemingly out of reach average house price today.
“Whilst Right to Buy was of great benefit to many council tenants in the early 1980’s, it’s legacy is one of spiralling house prices and the gap widening between the ‘have’s’ and ‘have not’s’” said Andy McBride, Business Development Director at Contractor Mortgages Made Easy.
“As the scheme was not policed particularly thoroughly, many tenants bought their council houses, moved out and rented out the property to private tenants, laying the foundations for the current ‘Generation Rent’ in which the average First Time Buyer is approaching 40yrs old.”
“While the Prime Minister’s recent announcement will help many housing association tenants achieve the dream of home ownership, it will do little to address the property deficit that exists in Britain, and is only getting bigger.”
David Cameron has pledged to replace every house sold “on a one for one basis”, however the National Housing Federation, representing housing associations, says that just 46% of properties sold under the Right to Buy legislation since 2012 have been replaced.
"Extending the right-to-buy policy to housing associations and selling our remaining council housing stock is not a responsible approach to addressing the housing deficit” says Jeremy Blackburn, Head of Policy at the Royal Institute of Chartered Surveyors.
"If proceeds from these are to pay for new build, owner-occupied houses on brownfield sites, it is not a workable policy that delivers across all tenures.
"A brownfield fund has the potential for unlocking land supply to build more houses in the next Parliament and is a welcome commitment from the Prime Minister. However, for this to replenish public housing, the proceeds must fund like-for-like replacements."
Article By: Mark McBurney, Senior Mortgage Consultant at Contractor Mortgages Made Easy
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