Last edited 24 Oct 2017

Right to buy extended to housing association tenants

On 7 October 2015, David Cameron announced a new agreement with housing associations and the National Housing Federation to extend the Right to Buy to 1.3 million more families. (Ref. gov.uk)

The Right to Buy scheme was introduced in 1980 to help council housing tenants buy their homes at a discount from the full market value of the property. The funds from selling off properties are recycled to help create replacement affordable properties.

Housing association tenants have an alternative ‘Right to Acquire’ their homes at a discounted price from the open market value. The differences between the schemes are:

The right only applies to eligible tenants living in eligible properties.
Housing associations can sell an alternative property to tenants.
The Right to Acquire discount is a flat rate, so it does not change depending on the number of years a person has been a housing association tenant.
The discount offered is less generous than that under the Right to Buy scheme.
There is no preserved Right to Acquire.

In 2015, the government proposed extending the Right to Buy to housing association tenants, giving them the same discount as council housing tenants.

In September 2015, the National Housing Federation proposed an alternative voluntary scheme for housing associations, which communities secretary Greg Clark accepted, on the condition that the sector agree the proposals within a week of the announcement. Agreement was confirmed in David Cameron's speech to the Conservative Party conference in October 2015.

The details of the scheme are:

Every eligible housing association tenant will have the right to purchase a home at Right to Buy level discounts. The presumption is that housing associations will sell the tenant the property in which they live.
The government will compensate the housing association for the discount offered to the tenant and housing associations will retain the sales receipt to reinvest in the delivery of new homes.
Housing associations will have the flexibility to replace rented homes with other tenures such as shared ownership.
Housing associations will have discretion not to sell a particular property in some limited circumstances, for example where a property is in a very rural area and could not be replaced, or where it is adapted for special needs tenants. However, housing associations will offer tenants the opportunity to use their discount to buy an alternative home from either their own or another association’s stock.

Cameron said: “Today we have secured a deal with housing associations to give their tenants the Right to Buy their home. That will mean the first tenants can start to buy their homes from next year.”

Communities Secretary Greg Clark said:

“We’re determined to ensure that home ownership is seen as a reasonable aspiration for working people. Right to Buy is a key part of this, offering a helping hand to millions of people who would have no hope of buying their own home without it. Today’s historic agreement with housing associations and the National Housing Federation will extend that offer even more widely, while at the same time delivering thousands of new affordable homes across the country.”

National Housing Federation Chief Executive David Orr said:

“This reflects our commitment to work in partnership with the government to deliver the commitment to extend Right to Buy, increase home ownership and boost the supply of desperately-needed homes across the country. This is a great offer for housing association tenants. It is also a great offer for the country, as our proposal means homes sold will be replaced, delivering an overall increase in housing supply. This is an ambitious sector that last year built more than one in three of the country’s homes, matching each pound of taxpayers’ money with £6 of its own. We will build more.”

In his speech, Cameron also announced an intention to redefine affordable housing to include starter homes. See Conservative party conference affordable housing for more information.