The scheme, launched by Housing Minister Sir George Young and Environment Minister Baroness Denton, gives tenants the opportunity to buy their homes at a discount by getting a mortgage that costs no more than their rent.
Sir George said: 'We know that owner-occupation is the preferred form oftenure for most people. Almost 1.5 million in the whole of Great Britain, including more than 1.25 million in England and Wales, have already benefited from the Right to Buy. But not everybody has been able to do so. For some tenants the purchase price of their home, even at a discount, is beyond their reach
'A few years ago, some independent research was carried out for the Department to investigate, among other things, the factors which encourage or discourage the take-up of Right to Buy. When tenants were asked why they had not bought their homes, most of them, unsurprisingly, cited financial reasons. Many said that they would like to buy if buying cost no more than renting.
'We first tried out Rent to Mortgage in three closely monitored pilot schemes in new towns in England and Wales, to see if it would work. It did. Tenants understood the scheme and were interested in it; it attracted tenants who were financially secure but who could not quite afford to buy outright; and lenders were prepared to lend on Rent to Mortgage sales. We found these results encouraging.'
He added: 'We acknowledge, of course, that there is more to home ownership than paying the mortgage. An owner-occupier also has to pay insurance costs and will be responsible for maintenance and repairs. And anyone who buys a flat will have to pay service charges, which we know can be substantial.
'Buying a home is an important decision and it is one that needs careful thought. Any tenants thinking of buying their home, whether under the Right to Buy, Rent to Mortgage or on the open market must obviously consider carefully whether they can afford it and whether they are ready to take on the additional responsibilities.
But this Government believes in choice. Rent to Mortgage will provide a new option to bring home-ownership within reach of more people who want it.
'This is why our campaign is not a hard sell, but is designed to provide information. Its aim is not to persuade people to buy, but to make them aware of their new option. We want to make it easy for tenants to find out more about our new scheme. Then it will be up to them to make their own decision, according to their own individual circumstances and what is best for them.
'There are currently over 1.4 million council tenants who pay full rent and could probably afford to buy their homes. In addition there are many thousands of secure tenants of housing associations.
For some the Right to Buy will still be the best option, others may prefer to continue renting, but for many Rent to Mortgage will provide an opportunity to buy their home which they would not otherwise have had. We're setting no targets but we hope that, many tenants will take up this new option to buy on rent to mortgage terms.'