A new generation of social tenants were today handed the keys to homeownership, as the Prime Minister and Housing Minister Grant Shapps launched a reinvigorated Right to Buy.

David Cameron and Grant Shapps talking to Right to Buy applicants.David Cameron and Grant Shapps meet with Right to Buy applicants.

The Prime Minister gave the green light to offer 2.5 million tenants the opportunity to buy their home with dramatically increased discounts.

This move will reverse years of declining discounts for tenants, which made Right to Buy meaningless in many parts of the country. Fewer than 3,700 sales were made last year compared to a peak of 84,000 less than 10 years ago.

Ministers are taking every effort to ensure tenants have the information they need to understand how today's changes could put them in the frame to become homeowners. To help councils fulfil their legal duty to inform tenants, the Government is making a range of materials available to ensure potential buyers are aware of the changes and understand the steps they should take if they decide Right to Buy is the right choice for them.

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The Government has moved swiftly to introduce the new discounts, and councils should waste no time getting in touch with their tenants, so as many as possible can take advantage of the scheme and use the discount as a firm foundation for home ownership.

For the first time, the additional homes sold under the revamped scheme will be replaced by new properties for affordable rent, ensuring there is no reduction in the number of affordable homes.

Councils will be able to sign an agreement with Government for using the receipts from sales to build new affordable homes in their area. The receipts will be expected to meet up to 30 per cent of the costs, mirroring the highly successful funding model used for the Affordable Homes Programme, which has exceeded all expectations and will deliver up to 170,000 new affordable homes by 2015.

Prime Minister David Cameron said: "I want many more people to achieve the dream of home ownership. In the 80s, Right to Buy helped millions of people living in council housing achieve their aspiration of owning their own home.

"It gave something back to families who worked hard, paid their rent and played by the rules. It allowed them to do up their home, change their front door, improve their garden - without getting permission from the council. It gave people a sense of pride and ownership not just in their home, but in their street and neighbourhood, helping to build strong families and stable mixed communities.

"But over time the discounts were cut, they didn't keep pace with rises in property prices, and this vital rung on the property ladder was all but removed. This Government is now putting it back by dramatically increasing the discount rates so that we support the dreams of those council tenants who to want to own the roof over their head."

(CD)