The Evaluation of Low Cost Initiative for First Time Buyers (LIFT)

5. ADDITIONALITY

Introduction

5.1 This chapter explores the extra value offered by the LIFT schemes, over and above meeting the needs of individual households and enabling home ownership. This includes exploring the impact of LIFT in relation to:

• reducing pressure on social rented housing;
• stimulating and sustaining the owner occupied sector; and
• achieving wider social benefits.

Reducing Pressure on Social Rented Housing

5.2 Through supporting households into affordable home ownership, the LIFT schemes have the potential to reduce pressure on social rented housing. There are two main ways in which this could occur:

• through freeing up Council and RSL properties directly, with people moving from the social rented sector into home ownership; and
• through reducing future pressure on Council and RSL properties, with people moving from the waiting list for social rented accommodation.

5.3 Information gathered by the Scottish Government, supplemented by our interviews with purchasers, identifies that the proportion of people previously living in social rented accommodation varies across the LIFT schemes. This information shows that the LIFT schemes are likely to have directly freed up approximately 1,130 social rented properties across Scotland.

Table 5.1: LIFT purchasers moving from social rented accommodation

Scheme	All households	Estimated no. moving from social rented accommodation	Estimated % moving from social rented accommodation
NSSE	2,409	385	16
OMSEP	3,198	448	14
GRO	867	35	4
Shared Ownership	794	262	33
Total	7,268	1,130	16

5.4 The LIFT schemes also have the potential to reduce future pressure on social rented accommodation. Overall, approximately a third of LIFT applicants were on a housing list for social rented accommodation. However, some of these households were actually existing tenants of social landlords seeking a transfer or alternative social rented property. These households have already been accounted for in calculating the social rented property freed up directly as a result of LIFT, and have therefore been removed from the housing list figures below.

Table 5.2: LIFT purchasers on social rented housing list

Scheme	All households	Estimated no. on social rented housing list	Estimated no. on housing list and not in social rented housing
NSSE	2,409	1,132	634
OMSEP	3,198	991	605
GRO	867	277	N/A*
Shared Ownership	794	79	46**
Total	7,268	2,479	1,285

*Sample size very small.
** Information not available - estimated figure.

5.5 The adjusted figures suggest that approximately 1,285 households were on the housing list for social rented accommodation, but not living in the social rented sector.

5.6 However, many of these 1,285 households would not have had a realistic chance of being housed in the social rented sector. Our interviews with LIFT purchasers suggest that only around a quarter of NSSE purchasers, 17 per cent of shared ownership purchasers and 10 per cent of OMSEP purchasers felt that they had a realistic chance of being housed by a social landlord. Of the very small sample, no GRO purchasers thought that they had a chance of being housed by a social landlord. This would indicate that between 2005/06 and 2009/10 LIFT reduced pressure on housing lists by around 247 applicants who may have had a realistic chance of being housed.

Table 5.3: LIFT purchasers likely to be offered social rented housing

Scheme	Estimated no. on housing list and not in social rented housing	Estimated no. of households who believed they had a realistic chance of being housed by a social landlord	Estimated % of households who believed they had a realistic chance of being housed by a social landlord
NSSE	634	178	28
OMSEP	605	61	10
GRO	Unknown	0	None
Shared Ownership	46	8	17
Total	1,285	247

5.7 This suggests that in total, the LIFT schemes are likely to have provided an alternative housing option for 1,532 households who would otherwise either have been in social rented housing, or likely to have been offered it. This represents 21 per cent of all LIFT households.

Producing New Properties

5.8 The LIFT schemes have directly resulted in the provision of new properties within the owner occupied sector, through NSSE, GRO and shared ownership. The NSSE database shows that 96 per cent of NSSE properties are newly built, two per cent are conversions or improvements, and one per cent is 'other'. Applying this information to the overall NSSE figures would suggest that 2,313 new build properties were developed through this scheme between 2005/06 and 2009/10. All GRO properties were newly built, and although information is not available for shared ownership it would be reasonable to assume that all (or the vast majority) are new build. In addition, approximately three per cent of OMSEP purchases were new build properties.

5.9 Overall, this means that between 2005/06 and 2009/10 a total of 4,070 new properties were developed through LIFT. This means that LIFT represents 3.5 per cent of new house completions in Scotland between 2005/06 and 2009/10 ¹⁷.

5.10 Our consultation with stakeholders found that some believe OMSEP does not add as much value as the other LIFT schemes, as it does not directly produce a significant volume of new build homes. However, the OMSEP scheme also has the potential to impact on the housing market and availability of owner occupied housing. It would be interesting to track the 'property chain' for OMSEP, to see what happened to households that sold their homes to OMSEP purchasers. There are a number of possibilities:

• the household could move on within the owner occupied sector in Scotland, through upsizing, downsizing or a sideways move;
• the household could move on within the owner occupied sector, but outwith Scotland, thereby leaving the housing market in Scotland;
• the household could move on within another sector - including the social rented and private rented sectors;
• the household could leave the housing market entirely through staying with friends or relatives, or death; or
• the household could break into more than one household, due to relationship breakdown or independence.

5.11 If households do remain within the owner occupied sector, this essentially means that OMSEP has resulted in one additional household being in owner occupation. This should, theoretically, result in stimulation of the housing market, and ultimately new build of properties for owner occupation. OMSEP could therefore be contributing to sustaining the new build owner occupation market.

5.12 Another impact of OMSEP could be that, by supporting one household to enter the owner occupied market, another household on the margins of home ownership seeking to enter may be unsuccessful as a result of the increased competition and therefore pushing up house prices. This likely to be more prevalent in pressured market areas.

5.13 Unfortunately there is little evidence available to allow further exploration of the impact which OMSEP is having on the wider housing market. The Scottish Government could consider undertaking detailed work tracking the impact of OMSEP sales.

Wider Social Benefits

5.14 Qualitative interviews with purchasers demonstrated that some had experienced wider social benefits as a result of participating in LIFT. Shared ownership purchasers and GRO purchasers reported very few outcomes in relation to quality of life or wider social benefits. One GRO purchaser stated that the house had improved quality of life for her and her daughter, allowing her daughter to settle in one school.

"If this opportunity had not come along we would still be living a transient life in the private rented sector."
GRO purchaser

5.15 NSSE and OMSEP purchasers had significantly more to say about the wider social impact of participating in the LIFT scheme. Over one third of NSSE purchasers and half of OMSEP purchasers said that their new home had improved their quality of life. This ranged from removing stress, being closer to work, being closer to children's schools, being able to walk to work, having a feeling of being 'at home' to simply being happier. In many cases, purchasers with children mentioned that their home enabled children to play outside, to live near their school, and to be more settled. Overall, 15 per cent of purchasers felt that they were now more secure and settled.

"It has changed my life really... It's given me a sense of stability and pride".
OMSEP purchaser

5.16 In addition, almost a fifth of NSSE purchasers and a quarter of OMSEP purchasers mentioned having become more independent and having more privacy as a result of moving home. A small number also mentioned being happier through being closer to friends and family.

"It gives her a degree of freedom - everything is hers. If she wants to paint it; we can, and she has the garden..."
NSSE purchaser's carer

5.17 Six NSSE and OMSEP purchasers felt that their home had resulted in wider financial benefits, including being able to run a business from the home, being able to walk to work, having an improved credit rating, and being able to work because the children were so settled. In one case establishing a business had motivated a purchaser to cease smoking so he "was fit enough to undertake physical work".

OMSEP - A purchaser's experience

One OMSEP household was previously living in an overcrowded home, sharing with in-laws. Their new home has greatly improved their quality of life. It has increased their daughter's confidence, as she now has stability, friends and can attend school in the same area she lives. It has also reduced the stress of sharing a home.

Summary

Freeing Up Social Rented Properties

5.18 Through supporting households into home ownership, LIFT is likely to have freed up 1,130 social rented properties across Scotland. It has also taken approximately 1,285 households off of social rented waiting lists. Of these, an estimated 247 people believed they had a realistic chance of being housed.

5.19 Overall, approximately 1,532 LIFT purchasers were living in social rented accommodation or likely to be offered it. This is 21 per cent of all LIFT households.

Producing New Properties

5.20 Almost all GRO, NSSE and shared ownership properties are new build, as are approximately three per cent of OMSEP properties. LIFT has developed over 4,000 new build properties between 2005/06 and 2009/10, which represents 3.5 per cent of all new house completions in Scotland during this time. The way in which OMSEP contributes to the housing market is not clear. It potentially contributes to the housing market through supporting new households into owner occupation, and stimulating demand for owner occupation.

Wider Social Benefits

5.21 GRO and shared ownership purchasers did not feel that LIFT had helped them to achieve any wider social benefits. However, many NSSE and OMSEP purchasers had seen real improvements in their quality of life due to their new home, including removing stress, stability for children's education and friendships, independence and privacy. A small number had also seen wider financial benefits such as being able to run a business from home.