On the 9th June 2022, Prime Minister, Boris Johnson, announced there would be an extension to the Right to Buy scheme, which will allow people to buy their houses, as opposed to renting them out, resulting in more people getting on the property ladder.
New Right to Buy Scheme
Extending this new Right to Buy scheme could benefit up to 2.5 million tenants, permitting people to become homeowners and allowing them to make changes and improvements to their homes. As said by the Prime Minister,
“Just as no generation should be locked out of home ownership because of when they were born, so nobody should be barred from that same dream simply because of where they live now.”
What is it?
So, what exactly is the new Right to Buy scheme? It originated in the 1980s by then Prime Minister, Margaret Thatcher, which allowed tenants who had lived in council housing associations the right to buy the house at a discounted price. This proved popular, and meant that 1 in 3 people purchased their homes, affecting around 6 million people.
With the recent resurrection of the scheme, it means that if you live in a rented house, you get a 35% discount on the market value if you’ve been a tenant for between 3-5 years, increasing by 1% for every extra year you live there after the 5 years. If you live in a rented flat, you get a 50% discount, rising to 2% for every extra year. The maximum discount you can get off is 70% or £87,200 in England and £116,200 in London boroughs.
Can I benefit from the new Right to Buy scheme?
If you have spent at least 3 years as a public sector tenant and a secure council tenant, you may be eligible for the new Right to Buy scheme. A public sector tenant is someone whose landlord is a public body, such as a council, housing association, or government department. The 3 years don’t have to be continuous, but you must have no legal issues with debt or possession orders. Your landlord will be able to confirm whether you are eligible for the scheme or not, and they are legally obliged to provide you with information regarding the scheme.
Should I go for it?
Many people are finding it too difficult to purchase a home due to the recent housing crisis, which has seen house prices climb faster than incomes. The new Right to Buy scheme could be your chance to get on the housing ladder thanks to the enormous discount of up to £87,200 that is currently available. Getting on the property ladder can be a significant investment for you and owning a home gives you more freedom to make decisions and improvements to it than renting does. However, because it is a significant commitment, be sure to investigate everything before enrolling.
If you want more information on the new Right to Buy Scheme, the Gov website has lots of information that is sure to offer you an unbiased view of whether or not it’s the best decision for you or not.
Looking to rent or buy but don’t know which ones the right fit for you? Then read our blog today on which one is best for you.