Housing
Scottish Policy Forum Paper no. 2
Dear Colleague,
The Housing Sector in Scotland, both public and private, continues to face extraordinary
challenges. Young families seeking to get on the first rung of the property ladder are finding
it difficult to raise deposits. Hardworking people on modest incomes feel excluded from
social housing waiting lists, and allocations policies are failing our communities.
Scottish Conservatives want to see safe sustainable neighbourhoods that people can take
pride in, and we want to help people meet their aspirations for home ownership.
In contrast, the SNP have chosen to hit the housing budget hard, and its flagship policies are
failing.
Your views and opinions will be invaluable in helping us formulate policies that deliver
results for our neighbourhoods and empower our communities to deliver the changes they
want to see.
This policy paper gives you the opportunity to have your say, and I look forward to seeing
your responses. The deadline for submissions is 13 April 2012.
Yours faithfully,
Alex Johnstone MSP
1. Private Housing
First time buyers/First time sellers
The Bank of Scotland estimated that there were 17,000 first time buyers in 2011, its lowest
level for 35 years. The total figure was 4% lower than 2010 and less than half the peak of
39,100 in 2006. Bank of Scotland said much of the recent decline in first-time buyers could
be explained by the need to put down a bigger deposit. The average deposit in the first 11
months of 2011 was £22,396.
This in turn means that 65% of those looking to move up the property ladder in the past
year were unable to do so due to a lack of interest from first time buyers. The typical person
buying a second property needed an average deposit of £60,670 in 2011, more than double
the average required a decade ago.
Scottish Conservatives are well aware that reckless mortgage lending contributed
significantly to the most recent worldwide economic crisis, which is one of the reasons for
the current deposit requirements. We also recognise that responsibly supporting first time
buyers and young families should be a priority for any government.
The Scottish Government operates the Low-cost Initiative for First Time Buyers (LIFT)
schemes for people on low to moderate incomes. It offers people the chance to buy a home
under shared equity, i.e. with the Scottish Government paying for a percentage of the house
and then being liable to receiving the same percentage of the sale price (should the owner
decide to sell it). The shared equity schemes are offered for a specified period of time (10
years in most cases) within which the buyers are expected to repay the Scottish
Government and acquire a 100% share in the property.
Shared equity schemes under private trusts (supported in part by government grants) were
something we advocated in the past – this was our Affordable Homes Trusts policy in 2007.
The Scottish Government runs a scheme with developers, but this would extend it to
whoever is interested in investing in a trust – businesses or individuals.
Construction sector
In 2011 a Federation of Master Builders’ survey revealed that half of Scotland’s building
firms have warned that conditions in the construction industry are in decline. Around 46%
of small construction companies experienced deteriorating conditions during the summer.
Latest figures estimate 172,000 Scots are employed in the construction, down from 188,000
last year. Furthermore, the Royal Institution of Chartered Surveyors in Scotland (RICs) said
builders were hit in the second quarter of 2011 by a lack of private spending and further
public sector cuts.
The Scottish Parliament debated a call by Fiona Hyslop, Culture Secretary, on HM
Government to reduce VAT on works to existing buildings. This is in line with a campaign in
England calling for a reduction in VAT for renovations, repairs and home improvements to
5%. Scottish Conservatives have not supported this, since the estimated cost to the UK
Treasury in year one topped £2.2 billion.
Home reports
Scottish Conservatives were the only party in Parliament that opposed the introduction of
compulsory Home Reports in legislation. Anybody who wants to sell a house in Scotland has
to provide a Home Report, including a Single Survey, an Energy Report and a Property
Questionnaire, to prospective buyers.
We have consistently argued that Home Reports are expensive (with the average cost
upwards of £500) and ineffective, since evidence suggests that one of the intended
outcomes of abolishing multiple surveys has not been achieved. At a time when the housing
market is struggling to pick up, it is essential that we support both buyers and sellers by
removing unnecessary red tape.
In England and Wales Home Information Pack legislation, similar to Home Reports, has been
repealed by HM Government.
Empty Homes
The Scottish Government recently announced plans to allow local authorities to impose an
additional levy on empty homes as well as cutting the empty property relief for nondomestic properties. We have stressed that these plans should be focused only on acting as
an incentive to enable people to bring these properties back onto the market and not as a
purely fund raising policy.
It has been suggested that property owners in difficult positions may be led to damaging
their properties (i.e. removing the roof) to avoid paying any increased charges which would
be the opposite effect than the one that the government is intending.
Q1. Do you think we should advocate increased funding for shared equity
schemes? Should the eligibility criteria for buyers and/or the operation of such schemes
be extended?
Q2. Do you think we should consider other options, for example, low interest loans
to FTBs to cover their deposit costs or even one-off grants?
Q3. Do you think we should advocate a VAT cut to 5% on residential property
renovation and refurbishment?
Q4. Are there other ways in which we can support the construction industry in
Scotland?
Q5. Do you believe Home Reports are necessary?
Q6. What is your opinion on the Scottish Government’s plans with empty
properties?
2. Social Housing
a) Housing Stock
Funding
House-building in Scotland has slumped to its lowest level in almost 30 years. The number of
houses built in 2010 was 16,852 – the lowest level since 1982 - with the number of new
private properties falling by almost half in just five years. The number of new public sector
and housing association homes also fell by almost 10 per cent last year.
Initially, Housing and Regeneration suffered the second largest cut in the whole of the
Scottish Government’s Spending review in September 2011. The total budget was cut from
£389.6m to £272.7m – a cut of nearly a third.
The Scottish Government has cut the housing budget at a time when social housing is
experiencing increased demand. Due to pressure from the Scottish Conservatives, and the
extra money allocated by the Coalition Government via Barnett consequentials, the Cabinet
Secretary for Finance John Swinney announced new funding for housing at Stage 3 of the
Budget Bill. Mr Swinney announced £45m over the next 3 years for affordable homes and
£42m over the next 3 years for loans and equity schemes. This still leaves a cut of £30m over
the spending review period, a cut of 7.7%.
The Scottish Government has made it clear that it does not support Private Finance
Initiatives (PFIs). PFI schemes could be used by local authorities to contract private sector
companies to build (or upgrade/maintain) social housing stock, with the responsibility for
running it remaining with the private contractor, whilst maintaining local authority
ownership.
New Homes Bonus
HM Government recently announced the introduction of a New Homes Bonus scheme. The
New Homes Bonus is a powerful, simple and transparent incentive that means that those
local authorities which promote and welcome growth can share in the economic benefits,
and build the communities in which people want to live and work.
The Government provides additional funding for new homes by match funding the
additional council tax raised for new homes and empty properties brought back into use
with an additional amount for affordable homes (socially rented accommodation).
Stock Transfer & Housing Associations
We have long supported the work of our housing associations which have a leading role to
play in the provision of new affordable housing and we have supported stock transfer by
councils to housing associations with tenant approval.
Stock transfer has been much more widespread in England than Scotland, with the last
Scottish stock transfer being in Inverclyde in 2007. The process is a polarising one and was
subject to numerous negative campaigns and accusations of manipulation by both local
authorities and the private sector.
Right to Buy
Right to Buy was introduced in 1980, giving the right to all local authority and some housing
association tenants to buy their home at a discount recognising the time they have spent as
tenants. We believe that the right to buy has done more to transfer wealth and power from
the state to ordinary working people than anything the Labour Party has ever done. It
triggered a transformation in housing estates across Scotland and gave people the pride of
home ownership.
Large numbers of those who exercised the right to buy have made substantial investments
in their homes since they became owners, usually much quicker than if they had remained
in the public sector.
The Scottish Government ended the right to buy for new tenants and new supply social
housing in the Housing (Scotland) Act 2010, which we opposed. In the 2011 Scottish
Parliament elections we committed to reinstating a “modernised Right to Buy” for new (and
recently built) social houses in local authority ownership.
HM Government launched a consultation in December 2011 called “Reinvigorating the Right
to Buy” and one for one replacement which will help support social tenants who aspire to
own their own home, by raising the discounts to make it attractive to tenants across
England. HM Government are matching this with a commitment that for every additional
home bought under right to buy, a new affordable home will be built.
Q7. Do you think we should keep Housing funding as one of our top priorities?
Q8. Do you think PFI schemes are a good option for local authorities? Should
private sector investment offset a portion of government funding, or should it be
supplementary?
Q9. Do you think we should consider incentives like the New Homes Bonus for
introduction in Scotland?
Q10. Do you support stock transfer from councils to housing associations? Are
there other ways we can support housing associations?
Q11. Do you agree with restoring or reinvigorating the Right to Buy? Should such a
policy have a specific commitment to building one affordable home for every one sold?
b) Housing Allocation
Around 128,000 households are on housing waiting lists across Scotland. Many have
expressed concerns about the way housing is allocated and we have consistently called for
allocations to be tailored locally, based on local priorities, as opposed to being constrained
by central government. Scottish Conservatives have been leading the way in highlighting
problems with anti-social tenants and we do understand the scale of this problem.
No restraints from central government
Currently, central government restrictions exist on the factors that Registered Social
Landlords can take into consideration when allocating housing. We have consistently argued
that local connections should have a higher weighting in social housing allocation.
Considering the length of time someone lived in the area can be important in maintaining a
closely knit society and promote further social cohesion.
Homelessness and temporary accommodation
Under current legislation, every homeless person is entitled to some form of
accommodation. Previously, those deemed in priority need (i.e. pregnant women) were
given preference in housing allocation. A target for 2012 was set for all unintentionally
homeless people to be regarded as being in priority need and therefore entitled to
permanent accommodation provided by the council.
Intentionally homeless people (i.e. those evicted for anti-social behaviour or not paying
rent) also need to be provided with temporary accommodation and advice while they look
for alternative accommodation.
Anti-social behaviour
Scottish Conservatives are well aware of the problems caused by anti-social behaviour in
flats, houses and communities across Scotland. We have consistently stressed that a zero
tolerance approach is needed to deal with this problem. We believe more needs to be done
to make sure that tenancy agreements are enforced, so that, at the first sign of trouble,
warnings are issued and respectable law-abiding tenants know that housing officials are on
to the perpetrators.
HM Government, as well as the Scottish Government more recently, has sought views on
simplifying the eviction process for anti-social behaviour. It has been suggested that if a
different court convicts the tenant of anti-social or criminal behaviour at or around the
house in question, the landlord seeking possession in court will not have to prove anti-social
behaviour occurred (again), but will only have to show that the tenant was already
convicted.
Q12. Do you believe there should be central government constraints on allocations
policy for Registered Social Landlords?
Q13. Do you think RSLs should give local connections more weighting in housing
allocation? Do you think this might be more appropriate in rural areas?
Q14. Do you have any comment on the current homelessness legislation?
Q15. Do you believe that further action is needed in tackling anti-social behaviour
in social housing? Would you support a simpler evictions process?