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Conservatives to promise £1bn housing fund and Right to Buy extension

by: Mortgage Solutions
  • 14/04/2015
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Conservatives to promise £1bn housing fund and Right to Buy extension
The Conservative Party will promise a £1bn fund to build 400,000 new properties on brownfield sites as part of two big housing announcements in its manifesto unveiled later today.

The party will also announce an extension of its right-to-buy scheme to housing association tenants as David Cameron puts housing at the heart of his manifesto, according to SkyNews.

The Prime Minister will say up to 1.3m tenants could buy their homes at a discount as a result.

Labour told the BBC the right-to-buy pledge would cost £4.5bn and was “unfunded”.

Other Tory policy pledges will include raising the personal allowance for tax to £12,500; increasing the starting salary for the 40p rate to £50,000; and raising the inheritance tax threshold for family homes to £1m.

Last year, Scotland confirmed it would abolish the Right to Buy scheme, with an amendment tabled by the Conservative party to change legislation proposed by the Scottish National Party defeated by 103 votes to 12.

Announcing the manifesto later today Cameron will say: “At the heart of this manifesto is a simple proposition. We are the party of working people, offering you security at every stage of your life.”

A flagship policy of Margaret Thatcher’s government in the 1980s, Right to Buy, allowed people living in council houses to purchase their homes at a discounted rate depending on the type of property and how long they have been a council tenant.

Under current rules, about 800,000 housing association tenants have a “right to acquire” their homes under smaller discounts, but the Conservatives would offer those people the same reductions as for those in local authority homes.

They will also pledge to extend the scheme to those who currently have no purchase rights at all, estimated to be about 500,000 people.

However, Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA) called the move “a quick win” for the Conservatives, with no guarantee of greater house building.

“The danger is that it will weaken the future capacity of the social renting sector to provide a safety net for those who cannot afford to house themselves via the private market,” he said.

“The risk is that in this manifesto along with others we will get more short-term initiatives and that politicians will continue to avoid owning up to the need for a fully formed housing strategy that balances support for people across all forms of housing tenure. Delaying the inevitable will only result in more difficulties in the long term.”

Cameron will say the move will be funded by new rules forcing councils to sell the most expensive properties once they become vacant.

He will say every house purchased will be replaced “on a one-for-one basis” with more affordable homes and no-one will be forced to leave their home, the BBC said.

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