Johnson confirms return of Right to Buy

Johnson confirms return of Right to Buy

Boris Johnson has confirmed plans to extend the right to buy scheme to tenants of housing association homes.

In an address yesterday Johnson said there are 2.5 million households whose homes belong to associations, and commented “they’re trapped, they can’t buy, they don’t have the security of ownership, they can’t treat their home as their own or make the improvements that they want”, adding that some associations have treated tenants with “scandalous indifference”.

But opposers such as housing charity Shelter have labelled the government’s right to buy plan as a “dangerous gimmick,” and have called on Johnson to “stop wasting time” on failed policies.

Shelter CEO Polly Neate said:

“The government needs to stop wasting time on the failed policies of the past and start building more of the secure social homes this country actually needs.”

During his speech Johnson also called for more low-deposit mortgages, stating that he wants to see a “ready stream” of low-deposit mortgage products become available.

“Yes, we have got to help people get deposits, but we need to have many more 95% mortgages … it is punitively difficult for so many people now in this country, it doesn’t need to be that way, that’s one of the reasons we are reforming it,” said the Prime Minister.

Reacting to the announcement, industry experts expressed concerns over failures of past schemes and the Government’s inability to deliver housing quotas.

Director of Benham and Reeves, Marc von Grundherr, commented:

“We’ve seen how previous initiatives allowing social tenants to purchase their properties has backfired, as it causes a significant shortage of stock for those most desperately in need of help, while also driving up property values in the process.

Of course, this time around it will be different, as they pledge to replace these purchased properties on a one for one basis. Unfortunately, if you believe that, you may also believe that the drunken shenanigans that took place at Downing Street during the pandemic really were innocent, work related events.

The Government’s record of delivering new homes is woeful at best and social housing has long been an area of serious neglect. To allow them to auction off existing housing association stock while also failing miserably to replace it would be a big mistake indeed.”

James Forrester, Managing Director of Barrows and Forrester, commented:

“Boris Johnson claims of a significant increase in the number of homes being built, but this simply isn’t true, which will come as little surprise given the fact that he’s lied to the British public time and time again.

In fact, the level of new homes reaching the market each year has fallen by fourteen percent and so once again, Boris’s bumblings couldn’t be further from the reality.

What’s more, promises to utilise Britain’s brownfield land is nothing more than a weary piece of recycled rhetoric, spouted on numerous occasions to create the illusion of tackling the housing crisis, but without actually following through with it.”

Commenting on the review of the mortgage market to look at access to mortgage finance for first-time buyers Tim Bannister, Rightmove’s director of property science, said:

“The next generation of first-time buyers currently need to raise a deposit that’s over 50% higher than ten years ago, while average salaries have only increased by 35%. That’s before you factor in if you’ll be able to get a mortgage, as right now if you’re buying on your own you’d need a hefty deposit of more than 30% to be able to borrow enough to buy a typical first-time buyer home. If a review of the mortgage market could help with the challenge of needing such a big deposit then it would be greatly welcomed by those who are able to demonstrate that they can afford monthly payments, but who are currently locked out of home-ownership.

It’s clear to see why there are many renters keen to get on the ladder, as they’re forking out 40% more each month than ten years ago, while low interest rates means average mortgage payments have only increased by 11% over that same time. Although competition among buyers is now starting to ease, we’re still in a market where demand is massively outstripping supply in many areas of the UK. This has already pushed prices to record highs so the challenge for first-time buyers of raising a deposit is not going to get easier. The review will take time and so any solution won’t help in the short-term, so as the cost of living increases more people are likely to look further afield at cheaper areas to get on the ladder.”

In his address Johnson also reaffirmed his commitment to unfair leasehold terms pledging to give leaseholders better control over their homes by prioritising leasehold reform, including the ability for a leaseholder to buy their freehold. In addition, welfare rules are set to change, giving 1.5 million people in receipt of housing benefit the option to use their benefit towards a mortgage.

Annie Simmons

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