Analysis of Responses to the Future of Right to Buy in Scotland Consultation

4: OTHER CHANGES

Repeal section 69

4.1 Section 69 of the Housing (Scotland) Act 1987 allows landlords to refuse to sell (if Scottish Ministers have given their authorisation) homes provided for tenants of pensionable age who have special needs, which a tenant would otherwise be entitled to buy. These homes have to be substantially different from normal houses. The legislation has become difficult to apply in a modern context, for example, the meanings of 'pensionable age' and 'amenity house' are ambiguous. Judgements need to be made on whether a home has been adapted specifically for a person of pensionable age or merely for a disabled person of any age. Features of new build housing which would once have been considered to be 'substantially different' are now standard.

4.2 The Scottish Government wishes to repeal Section 69 and allow landlords local discretion to decide which homes should be exempt from the right to buy because they are needed for elderly tenants with special needs.

Q10: Do you support the proposal to repeal Section 69 and delegate decision-making to landlords? Y/N

4.3 One hundred and thirty two (78%) respondents answered this question (although a further 11 respondents indicated their opposition to the proposal on the grounds that they supported the end of right to buy entirely). Many of the 132 respondents also supported the end of right to buy, but provided a view on Section 69 in the event of the right to buy remaining.

4.4 The vast majority (86%) of those responding agreed with the proposal to repeal Section 69 and delegate decision-making to landlords. This included all 28 local authorities who provided a view, 86% of RSLs and 78% of tenant/resident groups. Table 10 summarises the responses.

Table 10: Summary of views on repealing Section 69

	No. of respondents	%
In favour of repeal	114	86
Against repeal	17	13
Mixed views	1	1
Total	132	100

Reasons in favour of repealing Section 69

4.5 Five reasons in favour of repealing Section 69 dominated. These are listed below in order with the most frequently mentioned first.

• Landlords have the local knowledge of their stock and local circumstances which is required to make informed decisions on sales of adapted housing (19 mentions across a range of five respondent sectors)
• This will protect housing stock of value to future generations of older and disabled tenants (13 mentions across a range of five respondent sectors). One respondent commented:
  
  'Given the demographic projections for Scotland over the next few decades it is vitally important that relevant housing is protected for prospective older and disabled households with limited resources' (Shelter Scotland).

• Repeal of Section 69 will allow for local flexibility, responsiveness and discretion (nine mentions largely by RSLs and local authorities).
• Section 69 is currently too complex to apply and the proposal will simplify the process (nine mentions, eight of which were by local authorities). One remarked:
  
  'Section 69 is much too vague in definition and much too open to interpretation' (East Ayrshire Council).

• Consistent with delegation of decision-making on 'pressurised areas' to local authorities (six mentions, five of which were by local authorities).

4.6 Other rationales provided by four or fewer respondents in favour of repealing Section 69 were:

• It is expensive to adapt housing and such housing should not be sold at a discount. Repeal of Section 69 will protect investment (four mentions).
• There is no control over who purchases adapted housing after the initial sale (one mention).
• Repeal of Section 69 is part of the process of ending right to buy altogether (one mention).

Reasons against repealing Section 69

4.7 The main substantive rationale provided by four tenant/resident groups and one voluntary organisation was that repeal of Section 69 could lead to discrimination on the grounds of health, age or care needs. One respondent argued:

'We believe these proposals to be in direct opposition to the Public Sector Equality Duty to advance equality of opportunity for disabled people, given that they will prevent otherwise eligible disabled tenants from benefiting from the right to buy in the same way as non-disabled tenants simply because of impairment and a requirement to make adaptations to a tenancy to meet assessed needs' (Capability Scotland).

4.8 Other reasons against repealing Section 69 were:

• The Scottish Government should not be shifting responsibility onto landlords (two mentions).
• The status quo works (two mentions).
• Councils cannot be trusted not to politicise decisions (two mentions).
• This is not a priority for change (two mentions).
• Needs more debate before changing (one mention).

General comments

4.9 A common comment was that if repeal of Section 69 goes ahead then the Scottish Government will need to provide sufficient guidance, particularly relating to definitions, to ensure that landlords across the country operate in a consistent and transparent manner. It was argued that an appeal system should be put in place along with a monitoring system so that inconsistencies in local areas can be identified and addressed.

4.10 Five respondents questioned why a distinction should be made between elderly disabled and disabled people of any age. One respondent remarked:

'The determination should be related more to the features of a property rather than the age of the person occupying it' (Ind).

4.11 Another commented:

'It would be helpful if the proposal went further and noted that landlords could also exclude housing from right to buy because, for example, it was needed for younger people with mobility problems or wider health issues' (South Lanarkshire Council).

4.12 Four respondents recommended that tenants should be fully consulted and involved in the decision-making process should Section 69 be repealed.

4.13 Four respondents urged that landlords retain their right to sell adapted properties voluntarily to people with disabilities should they judge it appropriate, particularly as options to buy on the open market are often restricted for such people.

Extend the 10 year suspension

4.14 The 2001 Act extended the right to buy to all tenants with Scottish secure tenancies of non-charitable RSLs and those RSLs which became charities after 18 July 2001. This act also allowed for this right to be suspended for 10 years from 30 September 2002. Section 61A of the 1987 Housing (Scotland) Act (as amended) allows RSLs to apply to Scottish Ministers for the suspension to be extended for another 10 years. The Scottish Government is considering a proposal to make the current suspensions permanent while still keeping the condition that allows RSLs to remove any suspension.

4.15 The 10 year suspension does not apply to tenancies of most homes built by RSLs after 30 September 2002. These homes are covered by the right to buy, but due to the 'cost-floor' rule^[6] they cannot be sold at a discount. The 'cost-floor' rule will no longer apply after 10 years resulting in these homes being available to buy at a discount from 1 April 2013.

4.16 Putting in place a blanket suspension on right to buy for all RSLs from a certain date could be one option to end uncertainty for tenants over their right to buy. Alternatively it may be simpler to end the right to buy altogether for the stock affected.

Q11: Do you have any views on the 10 year suspension and possible future changes?

4.17 One hundred and nine (64%) respondents addressed this question. The complexities of the issues associated with the 10 year suspension and the various proposals tabled generated a complex mix of responses which proved to be difficult to summarise and interpret. In particular, it is not clear whether some respondents have argued for a complete abolition of right to buy or whether they are agreeing with an end to the right to buy for some stock. It is also not clear whether many of those agreeing that there should be an extension to the 10 year suspension wish this to be a blanket suspension as proposed or simply the maintenance of the status quo with RSLs applying every 10 years. The following analysis has been undertaken against this lack of clarity and is presented, therefore, at a general rather than detailed level.

Support for a blanket suspension

4.18 The proposal to introduce a blanket suspension for all RSLs from a particular date attracted much cross-category support (for the reasons above it has not been possible to quantify this) although many respondents stated that this was a second-choice option for them, with their preference being total abolition of right to buy.

4.19 Reasons in favour of a blanket suspension included:

• Will help to protect desirable social rented properties from being sold.
• Will provide an acceptable 'half way measure' between right to buy and abolition of right to buy.
• Will create more certainty for tenants and landlords alike.
• Provides equity across RSLs.
• Seems logical as otherwise RSLs will need to apply every 10 years.
• Saves resources which are required for applying for repeat suspensions.

4.20 Support was also expressed by a small number of respondents (largely RSLs) for the proposal to include within the suspension those homes built by RSLs after 30 September 2002. One respondent (Other) commented that houses acquired (rather than built) would still fall outwith this proposal resulting in an imbalance in rights. In addition, one respondent highlighted the situation of charitable housing associations that missed out on obtaining their charitable status by 18 July 2001 'cut off' date for right to buy exemption:

'In our view those associations should not necessarily have to apply for extensions to the exemption beyond 2012 simply because they missed a notional cut-off date. We understand that there are around 15 organisations falling into this category and anything up to 7000 properties affected' (Scottish Federation of Housing Associations).

Reasons against a blanket suspension

4.21 A substantial body of respondents recommended that rather than amending the right to buy policy further, it would be more straightforward to end it for all social housing. Repeat extensions or making the current suspensions permanent were seen as unfair to tenants who may aspire to buy their home but in effect may never be given this opportunity. As one RSL commented:

'Wouldn't it be simpler....to remove the 'right' when in reality it is highly unlikely that tenants will ever be able to exercise it?' (Cernach Housing Association Limited).

4.22 One further common argument against supporting the 10 year suspension and related policy was that these perpetuated inequalities between the rights of different tenants depending on landlord and circumstance. The proposals were viewed as sustaining anomalies even between tenants renting from the same RSL.

4.23 Another argument posed by one respondent (Oth) against a blanket suspension was that this could damage landlord/tenant relationships, at least in the short term (although it was acknowledged that over a longer period relationships may improve due to the increased transparency and certainty over rights to buy).

Arguments against any changes to the status quo

4.24 Eight respondents (largely tenant/resident groups and individuals) appeared to favour the status quo, with most stating simply that the current provisions are adequate and should remain in place. One RSL argued for retention of the status quo as they predicted a total abolition of right to buy within the next 10 years.

Q12: Are there any other right to buy issues which you think should be tackled?

4.25 Fifty-three (31%) respondents took the opportunity to raise other issues or re-emphasise aspects of previously raised issues which they felt were important. One RSL also commented that the current economic climate changed the context for home ownership, suggesting that further issues may well emerge:

'The financial stability of the external economy has to throw doubts on home ownership. As a housing provider we are dealing with clients who are potentially threatened with homelessness due to the increase in overall debt' (Berwickshire Housing Association).

4.26 A number of other specific right to buy issues were raised by respondents.

Purchasing of right to buy properties by wider family members

4.27 Nine respondents (five of whom were individuals) urged that the issue of family members other than the tenants themselves purchasing right to buy properties for future financial gain, should be addressed. The scenario of offspring purchasing their parents' house and selling this in the future was highlighted. One respondent (RSL) suggested that sales should be limited to tenants who can demonstrate that they can purchase their home by their own financial means.

Better maintenance of mixed tenure homes

4.28 Seven respondents (all but one being RSLs and tenant/resident groups) called for action to tackle the problem of maintenance issues in mixed tenure blocks. Ways of enforcing owner occupiers to maintain standards were urged, with the suggestion made that tenants must demonstrate their financial ability to maintain their property before being permitted to buy it.

Simplification of the right to buy policy

4.29 Seven respondents (five of whom were RSLs) urged that if right to buy continues, then effort should go into simplifying the eligibility criteria. One further respondent (LA) called for clearer and accessible guidance material to support the continuation of the policy.

Limiting opportunities for buying and renting

4.30 Six respondents (four of whom were local authorities) requested that individuals be restricted to only one purchase of a social rented property. Two further respondents suggested that once an individual has rented then bought their home they should not be permitted to rent another home in the social rented sector. One individual respondent recommended that an age limit of 70 years should be placed on tenants wishing to purchase their home. Another individual respondent requested that tenants known for anti-social behaviour should forgo the right to buy.

Clarification of rights on succession to and acquisition of right to buy properties

4.31 Six respondents (from a range of sectors) requested clarification on eligibility for discounts in cases where the tenancy changes due to succession (in the case of death of a tenant, for example) or the creation of joint tenancies. Various scenarios were painted by respondents which they felt needed to be addressed. For example:

'There has always been some doubt as to whether a move from a single to a joint tenancy involves an assignation of the tenancy. In addition, a joint tenant may succeed to a preserved right to buy even where they themselves were not in occupation of the property and had no tenancy interest prior to 30^th September 2002' (East Dunbartonshire Council).

'At present the right to buy is being passed on death, to joint tenants and spouses/civil partners, who may have no connection to the original tenancy. This chain can continue indefinitely and effectively protects the right to buy for a small number of tenants. This does not seem consistent with the spirit of the Housing (Scotland) Act 2010' (Home Scotland).

Maintaining the option of voluntary sales

4.32 Five respondents (from a range of sectors) emphasised what they perceived to be the importance of social landlords retaining the option to sell properties and other assets outwith the right to buy, on a voluntary basis. One respondent commented:

'There are a range of circumstances when such voluntary disposals will make business and investment sense and these will necessarily require associated guidance that sets out the type of circumstances that are appropriate for this mechanism to be used - regeneration being an obvious example, as well as circumstances of minority ownership in tenement blocks' (Chartered Institute of Housing Scotland).

Re-selling property bought under right to buy

4.33 Five respondents (four of whom were tenant/resident groups or individuals) expressed concern at properties bought under right to buy being put on the market for resale by their owners. Two suggested that a minimum period be stipulated within which time the property cannot be sold (six years; 5 - 10 years). Another recommended that the larger the discount given, the longer the period should be before re-sale is permitted. One tenant group considered that once a social rented property is sold, the owner should not be permitted to rent it out subsequently.

Clarification of meaning of 'occupation' of a property

4.34 Four local authority respondents requested clarification of what is meant by 'occupation' as used in Section 61ZA of the Housing (Scotland) Act 1987. The key ambiguity relates to whether 'occupation' should be defined as meaning the occupation as tenant or joint tenant, whether it should be given the same meaning as it has in terms of Section 61(10) of the Housing (Scotland) Act 1987, or whether it should be interpreted as including any physical occupation of a property.

Re-purchase of stock previously sold under right to buy

4.35 Three respondents (two RSLs and one representative body) suggested that social landlords should consider buying back properties sold under right to buy perhaps at market value, even if this is less than the price that the property originally sold for.

Publicising changes

4.36 Two local authorities recommended that whatever changes are made to the right to buy policy, there should be adequate publicity given to promoting these. One suggested that the Scottish Government should be responsible for this.

Other issues

4.37 A number of other substantive issues were raised by one or two respondents.

• Tenants currently on mid-market rents under the National Housing Trust Scheme with a short assured tenancy to be brought into affordable renting at the end of the National Housing Trust term should the existing tenant be unable to buy the property.
• The Scottish Government rather than social landlords should bear the cost of discounting property prices, as the original decision to discount was grounded in a political decision to sell off social housing.
• Pressurised Area Status should apply to both forms of right to buy and not exclusively the modernised form.
• Landlords should not be required to provide prospective tenants with information and advice on their future ability to buy their homes and the level of discount they will be entitled to. As the primary focus of a landlord is to allocate a dwelling to meet the households' needs and aspirations in terms of renting a property, it is not appropriate that the landlord should be required to give advice in relation to exercising their right to buy.
• To help meet the immediate loss of rental income due to any spike in sales before any change to right to buy policy, the Scottish Government should allow RSLs to retain the capital receipts from sales and roll these over to help fund future housing supply through their development programmes.
• It should not be possible for families to still occupy or purchase a home which has been specially adapted for a family member who has died or moved away.