The Department for Communities and Local Government has today published final details of the scheme, proposals for which were first announced in its housing strategy in November.
From April, tenants could be offered a discount of as much as £75,000 to purchase their home, with the current discount cap in London being increased by more than four times, and the cap being trebled in most other parts of the country.
Under the current system, discounts are restricted by a cap, which differs according to the region. The lowest cap is £16,000, which applies to all but two districts of London, while the highest cap is in the South East at £38,000.
Housing minister Grant Shapps says the new scheme will not reduce the number of affordable homes in the country as any homes bought under Right to Buy will lead directly to the provisions of new affordable homes for rent.
Councils will be able to sign an agreement with the government for using the receipts from sales to build new affordable homes in their area. The receipts will only need to meet 30% of the costs, mirroring the funding model used for the Affordable Homes programme.
Where receipts are not used locally they will be passed to the Greater London Authority and the Homes and Communities Agency, which will re-invest the money in new affordable housing across the country.
Shapps says: “We’re scrapping the miserly restrictions on the level of discounts under Right to Buy – great news for thousands of tenants who have done well for themselves and want to buy the home they live in.
“But we are determined to maintain the number of affordable homes for rent – so for the first time, homes that are sold will be replaced by a new affordable homes, helping councils meet housing need and getting the nation building again.”
Commenting on the Right to Buy scheme and the NewBuy Guarantee scheme, which launches today, prime minister David Cameron says: “Strong families and stable communities are built from good homes. That’s why I want us to build more homes and I want more people to have the chance to own their own home. We are acting today across the board to make this happen.”
He adds: “It’s no good hoping people will climb the property ladder if the bottom rung is missing. Affordable properties and available mortgages are vital.
“This government doesn’t just talk about expanding home ownership: we’re making it happen.”