Up to 18,500 council homes could be bought by tenants under the Right to Buy scheme over the next year, after potential purchasers rushed to submit applications following the drastic cut in discounts announced in last October’s budget.
An analysis by The i Paper has found that applications rose by ‘as much as 100 times their usual rate’ before the maximum discounts available dropped significantly in November last year – from £136,000 to £16,000 in most London boroughs and from £102,000 to £38,000 in the rest of the country.
The analysis was based on figures from a sample of 20 local authorities across England. Although many of the applications will not result in sales – The iPaper reports Wolverhampton Council as expecting around half of them to proceed – the predicted transactions based on the sample are 162% higher than 2023/2024.
This suggests that 18,500 homes could be bought under the scheme in 2025/26 as a result – 500 more than the 18,000 announced by the government as part of its Plan for Change – and lead to the highest level of RTB sales since 2005/06.
Although the discounts were reduced at the end of last year, new mortgage products aimed at social housing tenants are offering ongoing incentives.
In April, Barclays announced it would offer zero-deposit mortgages for RTB purchasers, lending up to 100% of the discounted price ‘as long as this does not exceed 90% of the valuers’ open market valuation’. Even with the reduced discounts, this would still allow potential buyers to borrow enough to purchase their home without the need for a lump sum.
Speaking at the time, Barclays head of mortgages Lee Chiswell said:
“The Right to Buy scheme has long been a crucial route to home ownership for council and housing association tenants, yet we know that saving for a deposit remains a key obstacle. By lending for the full value of the property, we’re removing the need for buyers to have any deposit at all, helping many completely sidestep their largest barrier to home ownership.”
