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Right to buy discount tripled to £75,000 from next month

Confirmation this morning that the right to buy scheme is being strongly boosted from next month. The scheme had effectively been killed off - there were only 3,700 sales under it last year. The discount was capped at £16,000 in London and around £25,000 in most of the rest of the country. From next month it will be £75,000.

Proceeds will be used to finance new "affordable rent" properties.

More controversial is a New Buy scheme where the Government and house builder will guarantee mortgages where just 5% is paid in deposits.The scheme is for newly built properties worth under half a million pounds. It reduces the risk to the lender thus persuading them to provide 95% mortgage. If the purchaser falls being with their mortgage payments then the lender could still repossess the property and sell it. But their risk of doing so at a loss would be reduced by the indemnity.

Some are worried about this being similar to Bill Clinton's approach of pushing banks to give mortgages to those who couldn't afford them. I don't think it sounds as dangerous as that.

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.

"We're re-booting the right to buy scheme to increase discounts for two million tenants in social housing in England.

"And we're delivering on our promise to offer affordable mortgages to buyers who might otherwise not be able to raise the money to buy a newly-built home.

"It's no good hoping people will climb the property ladder if the bottom rung is missing. Affordable properties and available mortgages are vital.

"So we're working with leading house builders and lenders to get the scheme underway.

   "It's a vital boost to the housing market, giving people good
affordable new homes and backing thousands of jobs in construction in
the process.

   "This government doesn't just talk about expanding home ownership:
we're making it happen."


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