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Right to Buy to revitalise home ownership

Right to Buy to revitalise home ownership

Category: Mortgages

Updated: 22/12/2011
First Published: 22/12/2011

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A revitalised Right to Buy programme will 'unleash a new generation of home ownership', the Government has said.

Housing Minister Grant Shapps outlined new proposals today which he said will make it easier for some of the two million social tenants in England to buy the home they live in.

Mr Shapps said the restrictions on discounts over the past few years have made Right to Buy meaningless in many parts of the country, with fewer than 3,700 sales last year compared to a peak of 84,000 less than 10 years ago.

It is being proposed that the cap to be increased £50,000, effectively trebling the discount in some parts of the country so more tenants can get a foot on the property ladder.

The Department for Communities and Local Government said that such a system would mean, for example, that someone in the West Midlands who had been a tenant for eight years on a household income of £20,000 could buy their £90,000 flat with a discount of £50,000 compared to £26,000 previously - effectively doubling their discount.

In London, a tenant for five years buying a flat worth £160,000 would also receive a discount of £50,000 - more than three times the previous cap of £16,000.

"When this Government came to power our inheritance was a paralysed housing market and a devastating collapse in construction," said Mr Shapps.

"The builders had stopped building, and millions of hard-working, aspiring home owners were blocked from taking their first step on the property ladder.

"This is especially true for people living in social housing. The previous miserly restrictions on discounts meant Right to Buy became, for many tenants, nothing more than an empty promise - a social mobility scheme run by Ebenezer Scrooge."

It was also pledged that there will be no reduction in the number of affordable homes.

The Council of Mortgage Lenders said it supported the plans in principle and welcomed the commitment to replace every home sold on through Right to Buy with a new affordable home.

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