Statistics Bulletin HSG/2004/6: Housing trends in Scotland: quarter ending 30 June 2004
NOTES AND DEFINITIONS
Most of the figures are compiled by the Scottish Executive, which collects the data from local authorities, housing associations and Scottish Homes/Communities Scotland.
The source of information is the Scottish Executive Housing Statistics Branch, unless otherwise stated at the foot of tables or charts.
Except where otherwise stated, all tables relate to Scotland.
A dwelling is a building or any part of a building which forms a separate and self-contained set of premises designed to be occupied by a family or, in some cases, groups of individuals (such as hostels or cluster flat).
Temporary dwellings are excluded.
Private sector . This includes dwellings owned by private landlords, whether persons or companies, and owner-occupiers.
Housing associations. These are societies, bodies of trustees, or companies established for the purpose of providing housing accommodation on a non-profit making basis. They also provide housing for special groups such as the aged, disabled, single persons, or housing on a mutual or self-build basis. In recent years, associations have extended their activities into provision of low cost housing for home ownership. In addition, registered associations (those registered with Scottish Homes / Communities Scotland) are heavily engaged in the regeneration of inner city areas through both rehabilitation and new building.
Non-registered associations are, in the main, now operating on a management basis only.
New Towns. In Scotland, New Town Development Corporations were established under the New Towns Acts for the purpose of laying out and developing New Towns. The New Towns in each region, with their designation and wind-up dates, are as follows:
Cumbernauld, Strathclyde Region (est. December 1955): Wound-up 31 December 1996. 1,275 houses were transferred to North Lanarkshire Council and 2,200 houses were transferred to Scottish Homes on 30 September 1996.
East Kilbride, Strathclyde Region (est. May 1947): Wound-up 31 December 1995. 7,834 houses were transferred to East Kilbride District Council (now South Lanarkshire Council) at the end of November 1995.
Glenrothes, Fife Region (est. June 1948): Wound-up 31 December 1995. 4,783 houses and 2,700 garages were transferred to Kirkcaldy District Council (now Fife Council) on 28 September 1995.
Irvine, Strathclyde Region (est. November 1966): Wound-up 31 December 1996. 1,978 houses were transferred to North Ayrshire Council and 715 houses were transferred to Irvine Housing Association on 29 November 1996.
Livingston, Lothian Region (est. April 1962): Wound-up 31 December 1996. 3,651 houses were transferred to West Lothian Council on 1 November 1996. 1,516 houses were transferred to Almond Housing Association on 29 October 1996, and 66 sheltered houses were transferred to Bield Housing Association on 21 October 1996.
Communities Scotland. This is an executive agency that replaced Scottish Homes on 1 November 2001. Communities Scotland works on behalf of Ministers to promote social justice and tackle exclusion through the delivery of sustainable community regeneration.
Stock transfers. Dumfries and Galloway, Glasgow and Scottish Borders councils have transferred their housing stock to not-for-profit registered social landlords. As a result, figures for these authorities are not reported in local authority tables. Data collection and reporting procedures are currently being reviewed in conjunction with Communities Scotland in order to provide an accurate picture of Scottish housing tenancy.
KEY INDICATORS (TABLE 1)
Dwellings allocated by local authorities. This is the number of applicants allocated houses by local authorities, including non-local authority stock to which the local authority has allocation rights.
New lets . This is the number of houses allocated to waiting list applicants and to other applicants such as those housed under the National Mobility Scheme or under Part II of the Housing (Scotland) Act 1987. Other transfers and exchanges are not included in this percentage.
Lets to homeless. This is the number of houses allocated to applicants under Part II of the Housing (Scotland) Act 1987. These figures are also included in new lets.
STOCK ESTIMATES BY TENURE (TABLE 2)
Estimates of the dwelling stock are based on the 1991 and 2001 Censuses, which include a count of the number of dwellings. The baseline tenure at the end of the year is derived through combining information from the Census, the Post Census Survey of Vacant Dwellings and public authorities' stock counts.
Estimating the tenure split of dwelling stock from the Census requires some assumptions about tenure of vacant dwellings where information on tenure was not collected directly at the time. The 2001 Post Census Vacant Survey did not assess tenure of privately owned properties, and the tenure splits from the Census have been applied to this case.
This baseline is updated each year using information provided by local authorities on new house building, conversion of property to housing use, and demolitions, together with public authorities' stock counts and Scottish Homes'/Communities Scotland's data on housing association stock.
Transfers of stock from one sector to another must also be taken into account, for example sales of public authority dwellings to tenants (owner occupiers). Most of this information on stock transfers is also provided directly to the Scottish Executive. However, no regular information is available on transfers from the private rented sector into owner occupation, and such changes in tenure have not been taken into account when producing the estimates.
FINANCIAL KEY INDICATORS (TABLE 4)
Housing finance figures for capital and current expenditure out-turn were changed from net to gross terms in 1988 with the introduction of the new planning total (elements of public expenditure for which central government is responsible). In previous editions of this bulletin, the figures prior to 1988 that were originally shown in net terms had since been revised and were shown in gross terms. These figures included expenditure on housing by local authorities, New Towns and Scottish Homes/Communities Scotland.
Housing Tender Price Index. The Housing Tender Price Index, compiled by the Scottish Executive Building Division, measures the overall change in contractors' pricing levels in Scottish public sector housing projects. It is based on successful tenders for 1-4 storey housing contracts throughout mainland Scotland. Using a standard sampling methodology, items to a minimum value of 25 per cent of each trade are selected from Bills of Quantities, are compared with a predetermined price base, and are weighted according to the proportionate value of the trade to the total Bill. The index figure is derived from the arithmetic mean of each quarter's sample. Tenders are allocated to the quarter in which the tender date falls.
Any enquiries about the index should be addressed to the Scottish Executive Building Division, Victoria Quay, Edinburgh EH6 6QQ (telephone 0131 244 7482).
MORTGAGE COMPLETIONS (TABLE 5)
Survey of Mortgage Lenders. The Office of the Deputy Prime Minister (and its former incarnations the Department of the Environment, the Department of the Environment, Transport and the Regions, and the Department for Transport, Local Government and the Regions) have produced a quarterly house price index since 1968 based on data from the Survey of Mortgage Lenders. The survey has been conducted in partnership with the Council of Mortgage Lenders and has involved a variety of mortgage lenders supplying a monthly 5% sample of mortgage completions.
The operation and analysis of the Survey of Mortgage Lenders is described in an article by Bob Pannell and David Champion in Housing Finance, No. 16, November 1992. About 50 lenders currently supply completions data through the survey.
More recently, many lenders have been supplying 100% samples through electronic data capture. The increased sample size (approximately 25,000 cases per month for the UK) has allowed the production of a revised monthly index in 2003. The current sample size for Scotland is approximately 39,000 cases per year.
House Price Index . The House Price Index is the weighted average of prices of a standard collection of dwellings. The index is adjusted for changes in the mix of properties. The initial quarterly series based on building society lending was terminated in 1993, when a series based on a sample of mortgage completions by all types of lender was established. Details of the methods by which the 1993-based index was constructed were published in Economic Trends, No. 348, October 1982.
In 2003, the index was revised to incorporate methodological improvements and a much larger sample from the Survey of Mortgage Lenders (see above). The index is now published as a monthly series with 2002 as the base year. Details of the new index can be found in the house prices area on the ODPM website ( www.odpm.gov.uk).
Number of loans . The methodology for estimating the average number of loans in Scotland was revised in September 2003 as a result of the variability in the Scottish data.
Under the current methodology, the house purchasing activity rate is determined for England and Wales by comparing the total number of transactions recorded by the Land Registry with the latest stock figures for owner-occupied and privately rented dwellings. This activity rate is then applied to the Scotland stock total to estimate the total number of transactions in Scotland.
Average income . Average income details are for mortgage loan purposes as recorded by the Scottish mortgage lenders.
HOUSE BUILDING (TABLES 6-11)
Started. A dwelling is regarded as started on the date that work begins on the foundations of the block of which the dwelling will form a part, and not on the date when site preparations begin.
Completed. A dwelling is completed when it is ready for occupation, whether it is in fact occupied or not. If a dwelling is transferred to another agency after completion it is considered to have been completed by the first agency.
PUBLIC AUTHORITY HOUSE SALES
Part III of the Housing (Scotland) Act 1987, as amended, gives most Scottish secure tenants the right to buy their homes, provided they are eligible and their home is not exempt. The 'applications to sitting tenants' figures in all tables concerning public authority house sales include right to buy, rent to mortgage, and voluntary sales.
For right to buy sales, the selling price is determined by the market value of the property less a discount (as laid down in section 62 of the Act). In turn, the level of discount is heavily reliant upon when the pre-purchase tenancy commenced, with those starting after 30 September 2002 being subject to modernised right to buy terms. Under the previous terms, the minimum discount in respect of a house is 32% after two years, plus an additional 1% for each year, up to a maximum discount of 60%. For flats, the minimum discount is 44% of the market value, plus an additional 2% for each year beyond two years occupation by the tenant, up to a maximum discount of 70%.
Under modernised right to buy, there is a single discount structure for all property types which starts at 20% of market value after the initial five-year qualifying period and then increases by 1% a year up to a maximum of 35% or 15,000, whichever is lower. Applications to purchase may include an element of the 'cost floor', which is covered by section 62(6A) of the 1987 Act and a specific determination. Under the cost floor rules, a discount may be restricted where the price, taking into account the discount to which the tenant is entitled, is less than the admissible costs incurred in providing, improving or maintaining the house over a period broadly 10 years prior to the application to purchase being submitted.
Houses owned by non-charitable housing associations came within the right to buy legislation in January 1987. For voluntary sales, the Secretary of State has issued a general consent permitting discounts of 30% for houses and 40% for flats, plus an additional 1% and 2% respectively for houses and flats for each year of tenancy up to maximum levels of 60% and 70%.
Rent to mortgage sales were first introduced as a pilot scheme in October 1989 for tenants of Scottish Homes/Communities Scotland and the New Town Development Corporations. From 1 April 1991 this was extended to local authority tenants. A new statutory rent to mortgage Scheme for all public authority tenants was introduced on 27 September 1993 via the Leasehold Reform, Housing and Urban Development Act 1993. However, the Housing (Scotland) Act 2001 repealed the rent to mortgage scheme with effect from 30 September 2002 (this did not affect people already buying through this mechanism).
HOUSING ASSOCIATION SALES (TABLE 15)
In 1994 Scottish Homes revised the classification of housing association sales and the figures provided for housing associations include all such sales.
RTB/RTM: Sales through right to buy /rent to mortgage schemes.
Voluntary: Voluntary sales to sitting tenants
Open market: Dwellings sold on the open market
Shared ownership: Outright (100%) sales of shared ownership dwellings. Figures not available before 1991-92.
Other sales: This includes sales of co-ownership dwellings.