The government will be pressed to offer loans for the extended Right to Buy instead of discounts, in a proposed change to legislation.
Lord Bob Kerslake, an influential cross-bench peer, told Inside Housing he would table an amendment to the Housing and Planning Bill so that association tenants are offered equity loans, as opposed to discounts.
Under current plans, housing association tenants will be given a discount of up to £77,900 nationally and £103,900 in London when they exercise their Right to Buy, due to come into effect in April.
This will be paid for through the sale of vacant, high-value council homes.
A report published by the Communities and Local Government committee earlier this month said the discounts should not be paid through local authority property sales, calling the funding model “extremely questionable”.
Lord Kerslake said he was tabling the amendment in order to “re-open the debate” about the funding of the discounts in light of the select committee’s report.
“With the select committee report raising issues about linking of high value sales to discounts, I think it’s worth opening the debate again,” he said.
Equity loans allow home purchasers to increase the amount of money they can borrow from a mortgage provider.
They are already used for the government’s Help to Buy scheme, in which the government supplies a loan of up to 20% of the property value.
The idea of offering equity loans to housing association tenants has been raised in parliament before by Conservative MP Jake Berry.
The Department for Communities and Local Government (DCLG) did not comment.
