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STEWARDSHIP AND RESPONSIBILITY: A Policy Framework for Private Housing in Scotland
EXECUTIVE SUMMARY
INTRODUCTION
Our objective has been to undertake a comprehensive review of housing policy as it relates to the condition of private sector housing in Scotland, the first such review since the Cullingworth report, ' Scotland's Older Houses', in 1967. In the years since then, the private sector has changed substantially. Owner-occupation is now the largest tenure in Scotland, while the private rented sector has declined in size and become more diverse. Significant inroads have been made into tackling the problems of "unfit" housing in the private sector but new problems have emerged.
To ensure a properly comprehensive approach, we began our work by mapping the key issues that need to be addressed. These are set out in full in our first report, ' Issues in Improving Quality in Private Housing' published in March 2002 and summarised in this second report. This report sets out our view of the range of changes that need to take place to ensure that Scotland's private sector housing stock continues to improve in quality and condition.
Our starting point has been the belief that the responsibility for the upkeep of houses in the private sector lies first and foremost with their owners and that there is a need for greater awareness and acceptance by owners of this responsibility. Our recommendations are intended to achieve this by influencing the operation of the housing market; improving co-operation between owners; reshaping assistance to owners and modernising the housing role of local authorities generally; and by encouraging and, if necessary, requiring owner-occupiers and private landlords to increase their expenditure on repair and maintenance.
Our work has been mostly taken forward through a series of sub-groups, involving additional co-opted members, which allowed us to take advantage of the full breadth of expertise that exists. We have also drawn on the responses to the consultation to the first report, on workshops to involve a wider range of interested parties and on a number of specific pieces of research commissioned at our request. We have also sought to "equality proof" our work by taking account of the views of representatives of particular "equalities groups".
QUALITY STANDARDS FOR PRIVATE HOUSING IN THE 21st CENTURY
Appropriate and measurable standards form a critical part of the policy framework for improving the quality of private sector housing. Properly defined, they will provide the basis for targeting action and establishing yardsticks for measuring progress. Where standards are linked to statutory powers or the commitment of public money, they must also be properly focused on legitimate areas of public interest and allow proper scope for owners to set their own priorities when investing in their homes.
We have set out our views on standards in three critical areas. First, we have made recommendations designed to modernise the Tolerable Standard, by extending it to include thermal insulation and unsafe electrical wiring. We also make proposals for ensuring that a consistent approach is adopted to the interpretation of the Standard by the introduction of statutory guidance. We also make it clear that this guidance should set higher standards in respect of water supplies, dampness and radon gas than has previously been the case. While the Tolerable Standard should continue to operate on a "pass/fail" basis and provide a trigger for statutory action by local authorities, in the future, this action is more likely to be targeted at specific failures rather than comprehensive rehabilitation or demolition.
We also propose a new cross-tenure Scottish Housing Quality Standard as the basis for local and national planning to raise the overall quality of the stock. This should be aligned to the proposed Social Housing Standard and we have made specific suggestions on the content of the Standard. Finally we also make the case for a new statutory Repairing Standard which sets out clearly the obligations on private landlords, based on that applying in the social rented sector but tailored to the specific conditions found in private renting.
IMPROVING THE OPERATION OF THE HOUSING MARKET
Our consideration of the housing market, and in particular the process of buying and selling homes, has focused on the quality of information available to buyers. We have taken the view that improving the information available to house buyers and sellers could mark a significant improvement in the operation of the market and improve services to those concerned. Our aim is to build on the strengths of the existing house buying and selling system and, in particular, its ability to deliver clear outcomes in a relatively short period of time.
The two key areas where we believe buyers and sellers need to be better informed are in respect of the condition of properties as they go on the market and the nature and extent of any common or shared maintenance and repairing obligations associated with the property. To achieve the improvements we are seeking, we make two key recommendations.
First, we recommend that there should be a single survey, initially commissioned by the seller but made available to all potential purchasers and paid for by the ultimate buyer. The survey would be carried out by a suitably qualified valuation surveyor and should include a valuation, good quality information on the condition of the house, its accessibility and the extent to which it is energy efficient. We envisage that a style of contract should be developed to ensure that the contractual liability of the surveyor transfers to the eventual purchaser and any lender. Linked to this proposal are recommendations intended to ensure that the arrangements for commissioning surveys, the relationships between the various professionals involved and the likely costs of the process are properly transparent.
We also recommend that sellers' agents should provide a purchaser's information pack which should include copies of any planning, listed building consents and building warrants relevant to the property, any guarantees of work carried out and details of any common repair and maintenance burdens attached to flatted properties and associated property management arrangements.
We recommend that these proposed changes should be piloted with a view to introducing them as "market led" voluntary initiatives but with the option of legislation being held in reserve should this be required.
FACILITATING COMMON REPAIRS AND MAINTENANCE
Approximately 25% of private sector homeowners have some degree of shared responsibility for the maintenance and repair of communally owned parts of their building. Effective mechanisms for ensuring that such repairs are carried out are essential if the condition of this part of the stock is to be improved.
We believe that this requires effective mechanisms for getting agreement between owners on what work needs to be done, deciding the respective contributions from each owner and ensuring that they all meet their share of the cost. We also believe that it is necessary to ensure that there are effective arrangements for managing the property, so that communal repair and maintenance requirements are identified and work carried out, and for ensuring that there are adequate arrangements for insurance of communal parts of the building.
We have looked closely at the draft Tenement (Scotland) Bill prepared by the Scottish Law Commission. We believe this Bill should be brought forward as soon as practicable and propose a number of amendments to it to secure the objectives set out above. These include provisions to ensure that, where appropriate in new developments, owners' associations are established and common building insurance policies are in place and, more generally, to ensure that non-resident owners can be contacted by others in the block. We also make recommendations for the promotion of best practice in the drafting of new deeds of conditions.
We also discuss ways of improving the ability of owners to recover costs from unco-operative owners and recommend that local authorities should have powers to act as a "backstop" when genuine difficulties occur, but in a way that avoids them simply becoming the automatic recourse of individual owners faced with repair problems.
Local authorities also have a role to play in encouraging the establishment of owners' associations and effective property management arrangements. We recommend powers to require owners to establish property management arrangements, linked to a proposal for a statutory power to require owners to put in place maintenance plans. We also recommend new arrangements for the accreditation of property managers in partnership with the industry, local authorities and consumer interests and that the scope of community mediation schemes should be extended to include disputes between owners.
PUBLIC SECTOR INTERVENTION AND SUPPORT AT THE LOCAL LEVEL
The potential impact of poor housing on individuals and households and the consequences of neglect of maintenance and repair for neighbouring owners and communities can be substantial. We are clear that, where poor housing conditions impact on other owners or the wider community, there is a case for public intervention that it is proportionate to the seriousness of the problem and provides a proper balance between the objectives of public policy and the rights and responsibilities of individual owners.
We make recommendations across the three key areas of public policy in this respect. That is: direct intervention by using powers to compel owners to undertake works; assistance to owners in undertaking those works; and strategic planning of interventions to achieve policy objectives.
We make recommendations for strengthening the Local Housing Strategy system in respect of housing quality through changing the approach to the preparation of Local Housing Strategies and improving the guidance to local authorities on planning to address private sector housing quality issues. We also recommend the provision of better support in gathering information through the national and local house condition surveys and the setting of targets and time-scales for the eradication of houses that fail the Tolerable Standard.
In relation to the assistance that is available to owners, we make a number of recommendations intended to ensure that financial assistance is targeted at those who most need it, with other forms of practical support available where they may be more appropriate. Our recommendations include removing the link between statutory notices or orders and mandatory grants; ensuring that services like care and repair and other assistance for those with particular needs are available nationally for all who need them; and providing powers to local authorities to offer a wider range of practical assistance other than subsidy, including advice, assistance with accessing finance or organising work and provision of equity-based loans.
We have also examined the powers available to local authorities generally, and propose a number of significant changes. These include replacing the existing Housing Action Area procedures with new comprehensive area-based powers to address the physical disrepair of houses and their wider setting, including dealing with problems that arise from abandoned properties or absent owners. We also recommend more flexible enforcement options for improvement orders and disrepair notices to allow local authorities to prevent the re-occupation of a property on sale, as an alternative to enforcing the works against the current owner or occupant; powers to carry out works to bring a house up to the Tolerable Standard without acquiring it (as is required under existing arrangements); and, where appropriate, powers to address minor disrepair and require owners to put in place and operate maintenance plans for their homes. We have also made recommendations to create a more flexible and effective charging order mechanism for recovering expenses incurred in enforcing these powers.
IMPROVING STANDARDS IN THE PRIVATE RENTED SECTOR
We want to see a thriving private rented sector providing well managed accommodation of acceptable quality for the diversity of types of tenants who, through choice or necessity, look to it for their housing. Despite its important contribution to meeting housing needs and demand, particularly in rural areas, the private rented sector suffers from a poor image. We believe that most private landlords want to operate lawfully and see the sector's negative image discarded but to achieve this, much greater professionalism in property and tenancy management is needed. The sector as a whole needs to develop an approach that has quality of service and value for money at its core. Our recommendations are designed to assist this essential process. Our approach is to seek to influence conditions and standards by empowering and supporting tenants, as well as ensuring that effective regulation can be targeted at the worst-performing landlords where local priorities and conditions warrant such an approach.
In particular, we make recommendations for creating a new Private Rented Housing Tribunal from the current Rent Assessment Committee system, to support tenants in enforcing their landlord's repair and maintenance obligations and, where appropriate, apply sanctions to landlords who do not maintain their property. The Tribunal would have powers to assess any breaches of the statutory Repairing Standard that we have proposed in Chapter Two and, where a landlord fails to carry out necessary repairs, abate the rent they are entitled to charge and prevent the property from being re-let (other than to the sitting tenant) until the work is carried out. In the worst cases, the Tribunal would also have a power to refer breaches of the Standard to the relevant local authority for enforcement action. Where the condition of a property is such that it affects the health, welfare or wellbeing of a tenant, the local authority would have a direct and independent power to serve a notice and require that the necessary works be carried out.
We also consider the case for further regulation of landlords more generally. We have concluded that whilst there is a need for a review of the operation of the assured tenancy regime it would not be appropriate to attempt to impose a single, national, regulatory framework on all private landlords. Rather, we make recommendations for the development of local accreditation schemes to be developed in partnership with local landlords, to promote and encourage better standards. Where this approach is unlikely to succeed, we propose that local authorities should have the power, subject to Scottish Executive approval, to put in place registration, certification or licensing schemes where particular local circumstances can be demonstrated to necessitate such action. Such local schemes could be tailored to local circumstances, be targeted at problem areas or market sectors as appropriate and carry with them effective mechanisms of enforcement where landlords fail to register or meet the necessary standards.
These new approaches need to be supported by a more positive national policy framework, higher levels of engagement with the sector by local authorities and better information on the rights and responsibilities of both landlords and tenants.
CONCLUDING REMARKS
Overall, it is clear that the condition of our privately-owned housing has improved significantly in recent years. Poor quality housing in the private sector is not, however, a thing of the past and we need to take steps to ensure good stewardship of the stock for the future. We have taken the opportunity provided by the breadth of our remit to develop an approach that is comprehensive and acknowledges that it is the decisions and actions of individual owners that count. At the same time, many of Scotland's minority ethnic communities are, for a variety of reasons, disproportionately found in the sector, whilst the number of older and low-income owners has grown significantly in recent years. We have sought to ensure that our approach takes proper account of the needs and interests of these communities.
At its core, our report represents a challenge to all those with an interest in private sector housing: the Scottish Executive, local authorities, housing professionals and, above all, to owner-occupiers and private landlords. We must all respond to this challenge.
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