Prime Minister Boris Johnson has announced plans to expand the government’s Right to Buy scheme to include tenants of housing association properties.

The scheme was originally introduced in the 1980s to enable council tenants to buy properties they rent at a substantial discount, but its popularity waned in recent years as property prices soared and fewer people were eligible.

The Prime Minister has confirmed his intentions to expand the scheme to include housing association tenants in a move he says could turn “generation rent” into “generation buy”. The plans include new help to enable those in receipt of housing benefit to use this to secure a mortgage and meet repayments.

The benefits include offering people the chance to buy their own homes, and some financial security. However, the announcement has been met with criticism from campaign groups who fear that expanding the scheme will make the UK’s housing crisis worse, and reduce the supply of social housing.

Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.

What is the Right to Buy scheme?

The Right to Buy scheme was introduced in 1980 with the aim of helping council housing tenants onto the property ladder. The scheme enabled tenants to buy a property at a considerable discount if they had been living there as a secure tenant for at least three years.

The scheme has since been dropped in Scotland and Wales, but continues to operate in England (and Northern Ireland, albeit differently, where it is expected to end in August).

The exact discount tenants can receive depends on the type of property (house or flat), how long they lived there, and its value. The discount can be anywhere from 35% to 70%, capped at a maximum of £84,600, or £112,800 in London.

You can read more about the scheme, the discount rates and the current eligibility rules in our article Right to buy: buying a council house.

Get expert mortgage advice*

Looking to discuss your mortgage options? Speak to an expert independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice. Your first consultation is free.

Get mortgage advice*

What do these changes mean?

A major caveat of the Right to Buy scheme until now has been that it is only available to council tenants, as opposed to those renting properties owned by housing associations.

While council housing is owned and managed by the local council, housing associations are private companies that rent properties to tenants who receive financial assistance. However, under current rules, those in housing association properties may still be eligible for the scheme if the property was owned by the council when they moved in and sold to a housing association during the tenancy.

The proposed changes are aimed at allowing those in housing association properties to access the scheme and buy their home at a substantial discount. This government states that the extension could enable around 2.5m renters to purchase properties from housing associations. Those in receipt of housing benefit may also be able to use these payments to secure and pay off a mortgage, rather than the money automatically going towards their landlords.

Why are people concerned?

The Right to Buy scheme has been extremely divisive in the past, with critics arguing that it helped lay the foundations for the UK’s current housing crisis.

Since the scheme was introduced nearly 2m council homes have been sold to tenants. However, more than a million people are currently on the waiting list for social housing, according to housing charity Shelter. There are concerns that should the proposed changes result in more homes moving from social housing to private property, the waiting list will become even longer, and property will become more unaffordable.

Polly Neate, chief executive of Shelter, said: “The maths doesn’t add up: why try to sell off what little truly affordable housing is left – at great expense – when homelessness is rising and over a million households are stuck on the waiting list?

“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.”

The government has promised that every home sold under the scheme will be replaced by a newly built, “like-for-like” property, although past attempts at doing this have not gone to plan. For example, a 2018 trial in the Midlands showed that it was difficult to build suitable replacements, with many of the newly constructed properties ending up in different areas altogether.

Kate Henderson, chief executive of the National Housing Federation, has argued that “there is not enough money from sales to build new social homes”, and it’s not currently clear where the additional funds will come from.

Kiran Ramchandani, director of policy and external affairs at charity Crisis, said: “This ill-conceived announcement is the exact opposite of what we need to tackle the mounting housing crisis.

“For decades our social housing stock has been stripped bare… to suggest this money can be used to secure mortgages without a costly investment to the benefits system is a fallacy.

“The only way to fix our broken housing system is to build more homes which people can afford – we urge the Government to get on with doing this if we’re ever going to end homelessness for good.”

Some experts have claimed that a revival of the scheme is destined to fail, as soaring property prices over recent decades has made property prohibitively expensive.

Rest Less Money is on Instagram! Check out our account and give us a follow @rest_less_uk_money for all the latest Money News, updated daily.