The government will take further steps to reinvigorate the Right to Buy in 2014 so more hard-working tenants can aspire to buy their home, Communities Secretary Eric Pickles announced today (3 January 2014).
The maximum discount for a house will increase from 60% to 70% of its value, and the £75,000 cap will start increasing in line with the consumer price index rate of inflation. A £100 million fund will improve access to mortgage finance, and new Right to Buy agents will guide people through the buying process.
Revenue from additional sales will be ploughed back into delivering new affordable homes for rent, which will help drive up the rate of housebuilding across the country.
Mr Pickles said the changes showed the government’s rock solid support for aspiration, and would ensure Right to Buy becomes a realistic New Year’s resolution for thousands of social tenants across the country.
The Right to Buy gives something back to families who worked hard, paid their rent and played by the rules. It allows them to do up their home, change their front door, improve their garden - without getting permission from the council.
It gives people a sense of pride and ownership not just in their home, but in their street and neighbourhood, helping to build strong families and stable mixed communities.
Since 2011 the government has helped almost 50,000 households onto the housing ladder - over 13,400 social tenants through the Right to Buy and over 36,000 through Help to Buy and earlier schemes.
Mr Pickles said it was clear evidence that wherever people are in the housing market, there is help on hand for hard-working, aspiring homeowners.
Communities Secretary Eric Pickles said:
For years the Right to Buy was slowly strangled, with a miserly cap on discounts killing the prospect of home ownership for most social tenants.
We don’t think governments should be in the business of vetoing aspiration. That’s why we reinvigorated the Right to Buy. It’s all part of our long-term economic plan to make Britain a country on the rise, where hard working people can be rewarded with the security and peace of mind that comes from owning their own home.
Eighteen months later and with over 13,400 hard-working tenants taking up the offer, it’s clear the public shares our view. But we want to go further, that’s why we will soon be increasing the maximum percentage discount for houses, and ensuring that the cash cap rises with inflation, so more social tenants can make Right to Buy their New Year’s resolution for 2014.
We’ll also continue to plough the cash from additional sales back into delivering new affordable homes for rent, which will help drive up the rate of housebuilding across the country.
Today’s move will extend the government’s commitment to help hard-working tenants and build more homes, which the Chancellor set out in the Autumn Statement. This included:
- introducing a Right to Move for social tenants who need to relocate for a new job or training
- establishing new Right to Buy agents who will guide people through the buying process, and providing £100 million to establish a fund to improve access to mortgage finance
- a £1 billion 6-year investment programme to unlock new large housing sites that will deliver around 250,000 homes
- allowing councils to bid for up to £300 million of additional borrowing against their housing revenue accounts to provide new affordable housing for their local community
Today’s announcement will increase the maximum Right to Buy percentage discount for eligible social tenants in houses to 70% - in line with the maximum discount for flats. The minimum percentage discount and the rate of increase year on year remain the same.
The maximum cash cap was increased in April 2012 to £75,000 as part of the reinvigoration of the Right to Buy. For London, it was increased in March 2013 to £100,000. These maximum cash caps will be increased annually in line with the consumer price index rate of inflation.
The government has already delivered over 170,000 affordable homes over the past 3 and a half years, with around £23 billion public and private investment planned between 2015 and 2018.