Council tenants should be allowed to convert their rents to mortgages as a way of getting themselves on the ladder of home ownership, according to David Cameron.
The Tory leader's latest proposal is a conscious echo of one of the most successful policies of Margaret Thatcher's government, which legislated 25 years ago to compel councils to sell to tenants who wanted to own their homes.
The idea is aimed at tenants who want to own property but are worried that if they buy outright they might not be able to keep up the payments, and would be at risk of repossession.
Under a rent-to-mortgages scheme, they would own only part of the home and have the option of selling back to the council and housing association if they ran into financial troubles.
The scheme brought in by the Thatcher government angered Labour councils because it forced them to sell to any tenant who wanted to buy and prevented them from using the proceeds to build new homes, and so ran down the stock of council housing, creating long waiting lists.
Mr Cameron's scheme would also compel councils and housing associations to sell, although some associations would be exempt. But it would be different from the Thatcher scheme because the money raised would be invested in new "social" housing to ease Britain's housing shortage.
"There is a huge gap opening up in our country, between those who have achieved the dream of owning a flat or a home, and those who, although they are working and striving and earning can't see how they are going to be able to achieve that dream," he told the Conservative First-Time Buyers' Summit.
"Isn't it time to look at a scheme where we can actually say to council tenants, housing association tenants, 'Why not change your rent payments into mortgage payments, so that as you pay that payment over time you will own that flat, you will own that home'?
"In this way we can create a whole new generation of home owners, we can take that revolution all the way. Millions of people would be able to own their own flat, own their home."
Mr Cameron also called for a major overhaul of the planning system to speed up house building and urged councils to give more financial support for shared ownership schemes.
He told the conference, which was hosted by Cicero Consulting in Westminster, that the Tories were also looking at ways of "streamlining" the house-buying process.Reuse content