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Future for housing in Scotland

31/10/2007

Plans designed to reform housing provision across Scotland to give first time buyers and tenants a better deal were outlined today.

Health and Wellbeing Secretary Nicola Sturgeon said that there was a need to develop a 'fresh approach' to ensure an adequate supply of affordable housing across all tenures.

A discussion document Firm Foundations - The Future of Housing in Scotland was published, giving details of the Scottish Government's proposals for increasing housing supply and choice.

The paper recognises the central role that home ownership plays in the housing system - and in society - by offering help for more people to buy their homes.

But it also takes full account of the need for a thriving social sector that can adapt to changing demand and offer more choice to those who cannot afford to, or do not wish to buy.

And it envisages a greater role for the private rented sector and its ability to offer choice and flexibility to particular groups during key points in their lives.

Communities, councils, social landlords, developers, tenants and lenders are being invited to comment on the proposals, which include:

  • Challenging Scotland's local authorities, developers and builders to increase the rate of new housing supply in Scotland to at least 35,000 a year by the middle of the next decade
  • Increasing the role of local authorities as landlords by offering financial incentives to councils that have the capacity to fund new council housing
  • Ending the Right to Buy on new social housing built by councils and housing associations
  • Establishing a Scottish Sustainable Communities Initiative to encourage local authorities and their partners to bring forward proposals for sustainable new settlements to meet demand in particular areas

Ms Sturgeon also confirmed that the Government will proceed with the introduction of the single survey scheme for house sales from late 2008.

She said:

"It is a fact that the Scottish housing system is not meeting our needs as a country.

"If people are to meet their needs and aspirations for housing that they can afford; and if the country is to benefit from sustainable growth, we must build more houses - to higher standards - across all tenures.

"That is why a fresh approach is required and the proposals in the document address every element of the housing system.

"The current rate of new house building - 25,000 new houses a year - is simply inadequate. It can and must increase if Scotland's housing requirements are to be met.

"I therefore propose to set a national goal to raise the rate of new housing supply to 35,000 a year by the middle of the next decade. This is necessary if we are to reverse declining affordability and I believe it is achievable".

On the back of recent research which shows that as home ownership is the ambition of most people in Scotland, Ms Sturgeon said the Scottish Government was determined to help people realise that goal.

She said:

"To do so, we will establish a Low-cost Initiative for First Time buyers - LIFT for short. Through LIFT, we aim to expand assistance for first-time buyers through a mix of Government grants, shared equity schemes, and mortgage related products and services.

"I can also confirm that we will take forward the Single Survey which will typically save first time buyers at least £200-£300 and ensure that all buyers have good information on the quality of a house before they place a bid for it."

Speaking of the proposal to offer local authorities incentives to build new council houses, Ms Sturgeon said:

"We intend to reverse the 30 year run-down of the local authority landlord role. This reflects our belief that local authorities have a continuing and developing role to play in the provision of social rented housing.

"Local authorities see little point in building new houses for rent if they are lost through the Right to Buy. Many housing associations share this view.

"I can therefore confirm that we propose to end the right to buy for all new social housing built by local authorities and housing associations - with an exception for existing tenants already eligible to buy their houses who are forced to move, for example because of demolition programmes.

"In short, this government will ensure that new social housing is safeguarded as a public asset for the benefit of current and future generations of tenants.

Ms Sturgeon also confirmed the Scottish Government's intention to abolish Communities Scotland. She added:

"I have decided to abolish Communities Scotland as a separate agency and bring its main non-regulatory functions into the core Scottish Government."

She confirmed that its regulatory functions would be reformed to operate outside the Government and independently of Ministers. Ms Sturgeon said:

"In reviewing its functions we have looked at the most effective structures to respond to the policy challenges we have inherited, alongside our aim of simplifying the public sector."

The consultation runs for 12 weeks and responses are welcome by January 25, 2008.

The Right to Buy was introduced in 1980 and around 487,000 sales took place from 1980 to 2006 (the most recent year available). Over this period, owner-occupation increased from 35 per cent in 1980 to around 67 per cent. There were around 9,000 sales in 2006. Although sales are declining year on year, around 8,000 sales are expected every year for the foreseeable future.

The Scottish Government's proposed changes would end the Right to Buy for new build properties, with the suggested exception of properties being occupied by tenants forced to move permanently as a result of demolition or refurbishment.

Initial estimates suggest that there may be around 10,000-15,000 tenants in this position in future years.