Social housing allocations in Scotland: practice guide

4. Reasonable Preference

This section covers the reasonable preference groups which must be taken into account when allocating social housing.

By working through this section readers will:

• be aware of the changes brought in by the 2014 Act.
• be familiar with the concept of unmet housing need.
• understand the three reasonable preference groups of statutory homelessness, under occupation and living under unsatisfactory housing conditions.

4.1 Reasonable preference groups

Reasonable preference refers to a level of priority given to applicants under certain circumstances. Through their allocation policy, landlords must give a reasonable level of priority to those applicants who fall within one of the reasonable preference groups.

As noted in the final HARSAG report, allocation policies for social housing should ensure that homelessness is not the main way in which people access a social rented home. By giving an appropriate level of priority to those in urgent housing need through their allocation policy, social landlords can play a key role in preventing homelessness.

The 2014 Act amended section 20 of the 1987 Act and sets out three categories of applicants who should be given reasonable preference in an allocation policy. These are:

• homeless persons and persons threatened with homelessness and who have unmet housing needs;
• people who are living under unsatisfactory housing conditions and who have unmet housing needs; and
• tenants of houses which are held by a social landlord, which the social landlord selecting its tenants considers to be under-occupied.

The relative priority given to each of the reasonable preference groups will depend on the profile of housing need in each landlord's area. Each landlord needs to decide how much priority it wishes to give to those in each of the reasonable preference groups. At the very least landlords should not give homeless people lesser preference than the other specified groups. This means that any weighting landlords give to different types of housing need must reflect their obligations to make a reasonable proportion of their lets available to homeless households.

Landlords can take the needs of other groups into account, as well as the reasonable preference groups, and can create other needs groups, such as giving priority to ex-service personnel. However, any other groups being prioritised for allocations must not dominate an allocation policy at the expense of the three reasonable preference groups in the 2014 Act.

4.2 Unmet housing need

The first two of the reasonable preference groups (homelessness and unsatisfactory housing conditions) are subject to the qualification that the applicant should also have unmet housing needs. The 2014 Act says that people have unmet housing needs 'where the social landlord considers them to have housing needs which are not capable of being met by housing options which are available'. Being able to meet their own housing needs could be described as being able to secure suitable accommodation which meets their needs from existing housing options.

Landlords are required to give reasonable preference to those who are homeless or threatened with homelessness or who are living in unsatisfactory housing conditions if their housing needs cannot be met in another way. This does not mean that landlords cannot house somebody whose housing needs can be met in another way, but it does mean they should not give them reasonable preference under their policy.

There are two elements landlords should consider when deciding whether someone has unmet housing needs. These are:

• the applicant's circumstances; and
• the existing housing options which are available and accessible to them.

An example of when it may be possible to meet housing need other than by giving an applicant reasonable preference for a social housing allocation would be where someone's current home can be adapted to meet the household's needs, for example by the installations of a ramp, stairlift or wet floor shower.

However, if an applicant's needs for an accessible or adapted home cannot be met by adapting their current home they would be given reasonable preference. Equally, landlords and/or the local authority will have to weigh up the practicalities and cost of adapting a property. If that cost would be excessive, landlords may consider someone's housing need cannot be met and give them reasonable preference for rehousing.

Most applicants who are homeless or threatened with homelessness, or who are living under unsatisfactory housing conditions, are likely to be entitled to reasonable preference.

Although the new heritable property provisions allow a landlord to consider an applicant's property-based assets (land or buildings), an applicant's income cannot be taken into account. This means that landlords cannot consider someone to be in a position to meet their housing needs because their income would allow them to buy their own home or rent a suitable home in the private rented sector. However, they may wish to discuss their full range of housing options with the applicant. Further information on the heritable property provision in set out in Section 8 of this Guide.

4.3 Homeless persons and persons threatened with homelessness and who have unmet housing needs

An allocation policy should include information about how a landlord will meet its duties to provide secure accommodation for households who are considered to be statutorily homeless by a local authority. The focus should be on providing that accommodation and neither the policy, nor allocations practice, should seek to challenge the local authority's statutory homeless decision.

Part II of the 1987 Act (as amended) defines "homeless persons". A person is homeless if he or she has no accommodation in the United Kingdom or elsewhere, or if he or she has accommodation, but it would not be reasonable for him or her to occupy it. A person is homeless if he or she has accommodation, but:

• cannot secure entry to it;
• it is probable that occupation of it will lead to abuse;
• it is probable that occupation of it will lead to threats of abuse from someone who previously lived with him or her and who is likely to carry out the threats;
• it is a moveable structure, vehicle or vessel and there is no place where he or she is entitled or permitted to place it and live in it;
• it is overcrowded and may endanger the health of the occupants; or
• it is not permanent accommodation and the local authority has a duty to provide permanent accommodation. Permanent accommodation includes accommodation owned by him or her or in which he or she is a tenant with a secure, assured tenancy or private residential tenancy. It also includes a short Scottish Secure Tenancy where such a tenancy has resulted from previous antisocial behaviour or from any prospective tenant or resident under an antisocial behaviour order.

Part II of the 1987 Act (as amended) also defines "persons threatened with homelessness". A person is threatened with homelessness if it is likely that he or she will become homeless within two months.

All unintentionally homeless households are entitled to settled accommodation. Local authorities have duties to provide accommodation and/or advice to those who are homeless or are threatened with homelessness. RSLs also have duties under section 5 of the Housing (Scotland) Act 2001 to house statutory homeless people who are referred to them by a local authority. RSLs have to meet section 5 requests from local authorities unless there are good reasons not to.

The Code of Guidance on Homelessness sets out the circumstances where an RSL may have good reason not to comply with a section 5 request and the time period within which local authorities and RSLs should reach agreement. In summary, good reason is where:

• an RSL is unable to make suitable housing available within six weeks of the request; or
• the only housing the RSL has available is of a particular nature (for example sheltered housing for older people) and this is not suitable for the applicant.

There are no other grounds for an RSL to refuse a section 5 referral. RSLs cannot use any other terms of their allocation policy for refusing to deal with a section 5 referral. RSLs should make sure that their allocation policy reflects arrangements for section 5 referrals and nomination agreements, where these exist.

From an allocations perspective, the Code of Guidance on Homelessness states that 'at the very least' landlords should not give homeless people lesser preference than the other specified groups. This means that any weighting landlords give to different types of housing need (for example through the use of letting quotas), must reflect their obligations to make a reasonable proportion of their lets available to homeless households.

4.4 People who are living under unsatisfactory housing conditions and who have unmet housing needs

There is no legal definition of 'unsatisfactory housing conditions' and landlords will need to determine the types of housing need that they will include within this reasonable preference group.

As a starting point, landlords should give reasonable preference to the housing needs which were reasonable preference groups prior to the 2014 Act. These include:

• living in a property which does not meet the tolerable standard.
• overcrowding.

There are also a range of other housing needs that are often recognised in allocation polices. Landlords do not have to include these categories if they do not reflect the housing needs in their area. However, it is likely that the following frequently used categories will be relevant to most social landlords in Scotland.

• domestic abuse.
• other harassment or abuse.
• insecure accommodation.
• needing an adapted or accessible home.
• social, community or family support.

There is also a range of other housing needs which landlords could consider. If they are of particular importance to their local community or the wider group of communities in which they operate, a landlord could consider including them within its unsatisfactory housing conditions group.

Another approach would be to give these housing needs a level of priority under the policy but not include them within the reasonable preference group.

The types of housing need which might fall into this group could include:

• looked after and accommodated young people.
• kinship carers, fostering or adoption.
• leaving the armed forces.
• leaving prison.

Further information on the range of housing need that might fall under 'people who are living under unsatisfactory housing conditions and who have unmet housing needs' is provided in Sections 5 and 6 of this Guide. This section also provides further information on the other categories of need that landlords may wish to consider including in their allocation policy.

4.5 Under-occupation

The 2014 Act introduced 'tenants of houses which are held by a social landlord and which the social landlord selecting its tenants considers to be under-occupied' as a reasonable preference group. Social landlords want to make best use of their housing stock and giving priority to social rented sector tenants who are under-occupying their home is one way of doing this.

There is no legal definition of under-occupation and landlords will have to set their own standard for this. However, most landlords will consider under-occupation to occur when a household lives in a home which has one or more bedrooms than they would be entitled to under their landlord's current allocation policy.

Under-occupation is mostly likely to occur when someone with children has originally been allocated a larger home and their children have grown up and left home. This means that under-occupying tenants are likely to be older.

Landlords should consider taking a housing health check approach and take a proactive approach in supporting tenants to consider whether their current home meets their needs and helping them to consider whether a move might help them live independently for longer.

Social landlords should give some level of priority to their own tenants who are under-occupying their home and who want to downsize. Landlords should also give an equivalent level of priority to the tenants of any other social landlord who has applied to them for housing and is under-occupying according to their allocation policy. The number of applicants involved is not likely to be high and tackling under-occupation supports the best use of the socially rented stock across the country.

People may find it difficult to leave a property that has been their home for some time. There may also be financial and practical disincentives to making a move. Landlords may wish to consider offering financial or other supports to encourage people to free up larger homes and make a move to a smaller home that may better suit their needs.

4.6 Relative weighting to different groups

The law does not specify the relative weighting that should be given to the reasonable preference groups and each landlord or group of landlords will need to decide on the relative priority they give to each. In making those decisions they may wish to consider the profile of the homes becoming available for let and who is applying to them for housing.

RSLs and local authorities should work together to decide on the proportion of allocations they will make available to those who are homeless or threatened with homelessness. As noted above, at the very least landlords should not give homeless people lesser preference than the other specified groups.

4.7 Applicants other than those with reasonable preference

Landlords can take the needs of other groups into account as well as the reasonable preference groups. For example, they may give a level of priority to those leaving the armed services or to those leaving prison.

Any other groups being given priority must not dominate an allocation policy at the expense of the three groups set out in the 2014 Act. Any additional criteria that are used to prioritise allocations must also fully comply with the 1987 Act as amended by the 2014 Act.

Key Points

The Housing (Scotland) Act 2014 sets out three categories of applicants who should be given reasonable preference in an allocation policy. These are homeless persons and persons threatened with homelessness, people living under unsatisfactory housing conditions and under-occupying social housing tenants.

The homeless and unsatisfactory housing reasonable preference groups are qualified by the applicant having unmet housing need. Each landlord needs to decide how much priority it wishes to give to those in each of the reasonable preference groups. At the very least landlords should not give homeless people lesser preference than other groups of applicants.

Allocation polices should include information about how a landlord will meet its duties to provide settled accommodation for households who are considered to be statutorily homeless by a local authority. The focus should be on providing that accommodation and neither the policy, nor lettings practice, should seek to challenge the local authority's statutory homeless decision-making.

The under-occupation provision means that landlords must give priority to their own tenants who are under-occupying and to tenants of other social landlords who are under-occupying. There is no legal definition of under-occupation, so the landlord must decide whether another landlord's tenant is under occupying based on its own allocation policy.

Landlords can take the needs of other groups into account as well as the reasonable preference groups. However, any other groups must not dominate an allocation policy at the expense of the three groups set out in the 2014 Act.