Posted on 14.4.15
Right to Buy; one of the first major reforms introduced by the Thatcher government appears to be a focal point for the political parties in a bid to win votes in the forthcoming general election.
Gorvins Solicitors have seen the number of clients, predominantly around the North West, purchasing their homes under the ‘Right to Buy’ scheme double over the past 6 months compared to the same period in 2013/14.
According to the BBC, the conservative party would open up the right-to-buy scheme to housing association tenants in England. Potentially, this means that up to 1.3 million tenants may still be able to buy at a discount, allowing more families to own their own home. Opposition from the Labour party question this promise claiming that it is not accounted for in any budget and there is a lack of funding behind the extension. It is projected that this would cost the government £4.5bn and according to an article on the BBC, Labour claim this is ‘unfunded’.
What is Right-to-Buy?
Currently in the UK a tenant living in a council house has the right to buy their property at a discounted rate. The conditions for this include:
- The property is the tenant’s only or main home
- Their current residence is not sheltered accommodation for either elderly or disabled people
- They do not have legal problems with debt
- Their current home is not due to be demolished
Joint applications can be made with:
- A person who shares your current tenancy
- If you live with up to 3 family members who’ve lived with you for 12 months or more
The maximum discount is currently £77,900 across England (with the exception of the London boroughs where it is £103,900) and is based on how long you have been a tenant, the type of property and the value of the property.
There are several factors that can make the discount smaller or larger, more details can be found on the government website.
How will the proposed policy of the Conservatives make a difference?
According to Theresa May it ‘means more families can be housed. That is a key thing.’
She explained to the BBC that ’15,000 homes would be sold and replaced every year as a result’ and that Local authorities would then be allowed to ‘manage their housing stock better.’
So it does seem to be a policy with the best intentions of benefiting more families across the UK.
Labour also have plans to help more people get on to the property ladder. They will ‘encourage banks to fund 125,000 news homes for first-time-buyers’ and as previously suggested, Labour claim the conservative’s proposal to be ‘un-costed’.
It is not only the opposition who need to be considered, but also the housing associations themselves. According to an interview on BBC Radio 4 with Ruth Davison of the Nation Housing Federation, she said ‘You can no more force housing associations to sell their assets at less than they are worth than you could force Tesco to sell their assets.’ She went on to claim there would therefore be a cost to the tax payer for every sale that is recompensed to the association.
There is a clear benefit to families who currently live in homes belonging to housing associations, it will mean that they might be able to afford to own their own property out right and secure an asset for their children in the future.
At Gorvins, our conveyancing team have worked on many Right-to-Buy sales and have the experience of helping buyers through the process. It will be interesting to see how this unfolds if the Right-to-Buy scheme is extended to housing associations and if it will make the number of people purchasing under the scheme increase in the next 5 years.
If you need any further information regarding buying your house, contact a member of our residential conveyancing team on 0161 930 5117