Right to Buy could be extended to housing association property

Millions of working Britons will be able to buy the homes they live in at a discounted price under a new "Thatcher-style" right-to-buy scheme being pushed by senior Conservative Cabinet ministers, The Telegraph has learned.

The plan, which could form a key Conservative manifesto pledge, would allow housing association tenants to buy their homes.

The money raised from selling off properties would be used to build more homes.

The Work and Pensions Secretary Iain Duncan Smith is understood to be promoting the scheme, which is designed to echo Baroness Thatcher’s right-to buy scheme.

The Tory policy, introduced in the 1980s, was credited with increasing support among aspiring working class voters for the Conservatives, which are one of the key groups for the next election.

Housing is now one of the most critical electoral issues, with young families being locked out of home ownership.

The Prime Minister has prioritised schemes like Help to Buy, which are designed to help workers onto the property ladder.

Senior Conservatives believe that extending Right to Buy would attract “C2 voters” – skilled working class.

The proposal is understood to be one of a series of suggestions made by ministers ahead of drawing up the manifesto.

Extending Right to Buy plans to housing association tenants could allow millions of people across the country to buy their homes. The current Right to Buy rules allow most council tenants to buy their homes at a discount, but the rules do not apply to housing associations, which are private, non-profit organisations.

The strategy is understood to have been proposed by, as part of the discussions about the Conservative election manifesto.

The proceeds from the sales of housing association property would be used by associations to build more social housing.

Under the present system, there is a Right to Acquire system for housing association tenants which allows them to buy their home at a discount.

However under the Right to Acquire system, the tenant must have lived in the house for five years and the housing association must have built or bought the home since 1997 or a council must have transferred it to the housing association since 1997.

Right to Acquire discounts are fixed for each area by the government, but usually vary from £9,000 to £16,000.

In contrast, Right to Buy allows discounts of up to £77,000 across England, except London where the maximum is £102,700.

In 2008, the think tank Centre for Social Justice, which was set up by Mr Duncan Smith proposed that councils and housing associations should be able to offer right to buy discounts of up to 30 per cent.

“Any profits that housing associations made from rents or from the proceeds of sales would, as now, be retained for investment in housing or other local community services, as associations are not profit distributing organisations,” ran the report on Housing Poverty.

Housing associations vary in size from fewer than 10 homes, to more than 50,000.

Altogether, housing associations provide about two and a half million homes for more than five million people across England.

Under the original Right to Buy rules, brought in under Baroness Thatcher in 1980, around 1.5 million homes were sold off.

Critics say the system has created a lack of housing for low income families. Supporters believe it helped millions of people onto the property ladder.

Kate Davies, the chief executive of Notting Hill Housing, who wrote the report for the Centre for Social Justice, said that she did not think that housing associations would be averse to the proposal, but said that the associations would not be able to subsidise the discount.

“The discounts for housing associations are very small at the moment, so our tenants are not in a position to use the Right to Acquire. The very big discounts available on council houses make them affordable, but it would be important to ensure that housing associations were able to replenish housing stock,” she said.