The government has announced a number of plans to boost home ownership through extending the right-to-buy scheme for housing association tenants and supporting those on Universal Credit.
While tenants in council homes are eligible to buy their homes at up to 70% off the market value, the right-to-buy scheme is less generous for up to 2.5 million housing association tenants. The government is now looking to work with housing providers to design a right-to-buy scheme to help its tenants get on the property ladder. The Prime Minister has also committed to building a replacement social home for each one sold.
Prime Minister Boris Johnson said:
“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.
“For four decades it has been possible for council home tenants to use a discount to buy the property they live in.
“Over that time almost two million people have been helped into home ownership.
“They have switched identities and psychology, from being dependent on the state for every repair – from damp-proofing to a new front door – to being in charge of their own family home, able to make improvements and add value as they please.”
The government will also launch an independent review of access to mortgage finance for first-time buyers and increase availability of low-deposit options including 95% mortgages. This will be the first comprehensive review of the mortgage market for a decade that aims to address the fact that while over half of renters could afford monthly mortgage repayments, only 6% could immediately access a typical first-time buyer mortgage.
Changes to Universal Credit rules were also pledged to help those claiming in-work benefits be incentivised to save towards a deposit on a property. The government has committed to allowing housing benefit to be used for mortgage repayments, and to exempt savings in a Lifetime ISA account from impacting benefit claims: Universal Credit begins to taper off once a recipient’s savings exceed £6,000, and stop entirely above £16,000.
Existing homeowners will also benefit from improvements to support for mortgage interest (SMI), allowing people to receive the support to help meet mortgage interest payments if they becoming unemployed after three months of joblessness.
