Tuesday, 02 September 2014

Right to buy act becomes law

An act that will ditch the right to buy for new social housing tenants in Scotland has become law.

The Housing (Scotland) Act was passed by the Scottish Parliament last month, and was granted royal assent on Friday.

It will abolish the right to buy for new social tenants and new social homes, as well as setting up a new Scottish housing regulator, and a charter for social housing.

The Scottish Government believes the act will keep 18,000 homes in the social rented sector over the next 10 years.

Housing and communities minister Alex Neil said: ‘This is a major milestone for social housing in Scotland. The housing act will ensure that social housing is protected for future generations, providing homes for the people and jobs in the Scottish economy.

‘It will give council and housing associations the confidence to invest in new housing without fearing they will have to sell those houses at a discounted price.’

The new rules on right to buy were welcomed by Shelter Scotland. However other elements of the act have been more controversial.

Housing associations have expressed concerns about the power of the new regulator, which will be able to transfer housing association assets to other providers without holding a statutory inquiry.

And the Chartered Institute of Housing Scotland has said that although the new charter is ‘well intentioned’, existing standards are adequate.

The act will come into force on 1 March 2011.

Readers' comments (17)

  • Outside Housing

    Well done Scotland for having the sense to protect what housing remains for those who will need it in the future. How about England doing the same?

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  • Gavin Rider

    RtB does nothing to reduce the supply of social housing because the tenants buying them have security of tenure and would remain in their houses anyway. All RtB does is convert the demand for one social rented home into demand for one owner-occupied home. It reduces demand by exactly the same amount as it reduces the stock. The net effect as far as dealing with unsatisfied housing need is concerned is zero.

    The only way in which a home purchased through RtB could have been used to reduce the waiting list would be by the existing tenant leaving. Since social housing tenants generally cannot afford to buy on the open market and can only afford to buy by being offered a discount on their long-term property in proportion to the length of their past occupancy of it, this means that those tenants are not likely to leave and make the property available for relet.

    Furthermore, if an ex-council house is later sold on the open market, it will fall into the category of homes that are available for first-time buyers, thus removing one young family from the list of those who would otherwise have to register on the housing list. So, RtB properties continue to help reduce the housing waiting lists even after being sold off.

    The only way to address the unsatisfied need for social housing is to build more of it, not to prevent people from buying it through RtB.

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  • Sidney Webb

    Gavin - is it snowing in your world too!

    Yes RTB does not remove the house from existance. Indeed in many cases the repossessed former Council home gets snapped up at auction and converted into a HMO, rented out lucratively room by room at massive cost to the taxpayer through LHA - but then you'd support such private enterprise wouldn't you.

    This simple fact is that the house once sold is never available to a social tenant again, and is therefore out of the affordability range of the low to average paid person. That is why the waiting lists grow and grow, and the benefit bill gets higher and higher.

    Well done Scotland on ensuring affordable housing will exist for generations to come, and with new build social housing, will actually become increasingly available. This will have the effect of lowering private sector rents through competition, and have a knock on effect of price stability in the owner-occupied sector too. If only we could have the same on our side of the border, but unfortuantely we are stuck with turnips who think if you don't build and sell off what's left of the social stock it will somehow all magically come right again.

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  • Gavin,
    The RtB does cost social housing a lot of money.
    Discount given and loss of rental income.

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  • Sexton

    Although they are usually ahead of us, I believe that they got this one wrong.

    Land is scarce resources, and should not belong to big land owners such as LAs, HAs, .... all the time.

    My hope is that one day, everyone in this country own a parcel of land and a shelter, who they can happily call it a home.

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  • ...

    At the moment England’s population density is 1,010 people per square mile......so, nice thought that it may be, it will probably be a jolly small parcel of land!

    I see no problem with RTB, its not the principle that's at fault...it's the discount given.

    Rather her than end the RTB, it would be far better to either scrap the discount, or, keep the discount but if the property is sold within the liftime of the buyer ( or an agreed fixed period) the percentage discount is paid back to the Council, so that both parties benefit from any increase in value, enabling money to be invested back into housing.

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  • Are there official figures to detail how many RTBs owners’ end up repossessed compared with how many of the now RTB home owning former tenant remaining in same property?
    When RTB was at its peak, those that proposed that it was stopped failed to realise that by taking this action, the occupying tenants in most cases were likely to remain there – i.e. not give up tenancy and move out. If same was a secure tenant then technically that property remained in that family for 100 years, again not increasing rental stock.
    The fact there was a discount was in most cases the deciding factor between whether tenant purchased or continued renting same. If tenants still have home owing aspirations, then a portable discount might be the answer, providing tenant not sub-prime. This quickly frees up the rented property, gives the social rent tenant financial incentive and is cheaper than a build.
    The sales money was there at RTB peak – the fact that councils weren’t allowed to build replacements and money went in to generic piggy bank was the real sting.

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  • Sidney Webb

    Watt Watt

    No offical figures but plenty of conjecture. However, if you look at some Private Landlord 'how to' style websites they often remark that the easiest way to find property is at auctions where numerous repossessed former local authority properties come up for sale - they go on to remark that these properties are often of a superior construction, more able to be converted into flats or HMOs, and are in locations that are easier to market. The perception that the private rented sector is predatory on the former local authority housing is magnified by the fact that few new builds are purchased by private landlords, and even fewer are commissioned by private landlords.

    You are spot on observing why RTB has removed social housing, and how easy it would have been to permit ownership without removing choice from future generations. However, the declared political aim was to remove the 'unfair competition' to private landlords. When Thatcher was asked directly about the cost of her policy in terms of higher private rents she said 'let housing benefit take the strain'.

    The Scots are so right to make this change, the sadness is that it is much too late to save the sector, for which Blair will be forever condemned (with Flint and her ilk alongside)

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  • Sexton

    Keepingit real and those who do not have much knowledge of urban design. The entire population of the contry can be housed in an area with a radius of 80 miles, by employing the same the same principle as Hampstead Garden Suburv design.

    The issue of land scarcoty is not the lack of land but the large landowners.

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  • Gavin Rider

    RtB is not the cause of a dwindling social housing stock, failing to replace the sold properties with new ones is.

    RtB is not the cause of social housing shortfall, the failure to build enough additional social housing to satisfy demand from new households is responsible.

    Andrew - social housing is not a profit-making enterprise, so rents charged do not make profits for local authorities. As far as I understand the finances, rents don't even cover the cost of maintaining the housing. So if the net financial contribution of a rental property to a local authority's cash flow for maintaining its housing is negative, because the costs exceed the rental income from it, selling off that property is not a net cost to the local authority, it is a net benefit in cash-flow terms.

    That is why selling off older properties to long term tenants and replacing the old stock with newer, more cost effective properties, is a good idea. The problem is that local authorities have not replaced their sold stock with new replacements. That is not the fault of RtB.

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