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Executive Summary
Background
The Right to Buy was introduced in Scotland in 1980 to give those living in local authority rental accommodation the right to buy their house or flat at a discounted rate. The Scottish Executive regularly collects statistics from local authorities about applications to buy and sales under the Right to Buy and there has been a range of quantitative research looking at issues such as the condition, and resales, of Right to Buy properties. However, the research carried out was unable to explore in detail motivations, experiences and aspirations associated with the Right to Buy.
The aim of this research was to explore views and experiences of Right to Buy amongst:
- tenants who had not exercised their Right to Buy.
- tenants who had purchased their property under the Right to Buy
- resale purchasers
The research looked at:
- The motivations for exercising, or not exercising, the Right to Buy
- The impact of Right to Buy on households' housing choices and opportunities
- How far Right to Buy sales and resales provided access to affordable home ownership
- Current tenants' plans to exercise their Right to Buy
Method
BMRB conducted 52 face-to-face in-depth interviews across Scotland. Respondents consisted of;
- Tenants with the preserved Right to Buy (12)
- Tenants with the modernised Right to Buy (7)
- Right to Buy purchasers still in their Right to Buy property (14)
- Right to Buy purchasers who had sold their Right to Buy property (10)
- Purchasers of ex-Right to Buy properties (9)
Motivations for purchasing under the Right to Buy
Those respondents who had purchased their council property through the Right to Buy cited location as a key factor prompting them to do so. Most respondents would not exercise their Right to Buy unless the property's location was, to summarise, ideal. Indeed location was the most important factor for many. The preferred location was, first and foremost, one where the local neighbourhood was characterised by good social order and a lack of anti-social behaviour. Whereas buyers on the private housing market are likely to take into account considerations of a property's location in order to check its re-sale potential, these respondents cared about location simply because they wanted to buy a home in an area where they would be happy to live.
Respondents reported that it was becoming increasingly difficult for tenants to buy council properties in ideal locations. The uptake of the Right to Buy was seen to have depleted the council stock in ideal areas, making tenancies - and therefore opportunities to buy - there difficult or impossible to acquire.
The size of property was also very important. Most respondents would be reluctant to exercise their Right to Buy if the type of property was not ideal. (However, several respondents pointed out that an ideal location might override a property's shortcomings.) A preferred property was usually one that was 'large enough' for its occupants, particularly in the case of families with children who required three or more bedrooms. The popularity of Right to Buy was seen to have depleted the stock of larger council houses suitable for families. By contrast, a few older respondents had considered downsizing to a smaller property, or moving to a ground floor property, at retirement age. It was implied that tenancies for these types of property were easier to secure, although some expressed concern over the lack of availability of this type of property. Respondents listed as secondary features of an ideal property a private front door and a garden. However, properties with these were reported to have become all but unattainable in many areas.
Tenants who had not exercised the Right to Buy often cited the less-than-ideal location or size of their council home as their reasons for not buying it. Some also mentioned financial limitations, such as having no income other than benefits: they predicted that this would make them ineligible for a mortgage. Additionally, many were worried about the responsibility for repairs which transfers to owners at the time of purchase.
Respondents also gave some positive reasons for not exercising the Right to Buy. In particular, being able to rent a property from the local authority was recognised to suit some respondents' life stage and personal circumstances.
Despite the reasons cited for not exercising their Right to Buy, it transpired that many tenants, including most of those with the modernised Right to Buy, were vague about the basic details of Right to Buy. Many did not know whether they were currently eligible to buy their home or not, or what level of discount they might receive.
The fact that respondents with the Right to Buy would wait until they had secured the tenancy of a property in an ideal location, or of an ideal size, before buying for the first time distinguishes them from many first-time buyers on the private housing market. It is common for the latter to be prepared to compromise on their earlier purchases with a view to 'trading up' through successive purchases. In the Discussion chapter, we consider that one reason for this difference might be that compromising is easier to do with the choice of properties offered by the private housing market. The Right to Buy purchaser has only one property to 'choose' from. We also argue that potential Right to Buy purchasers are also somewhat disabled from 'trading up' by the imposition of a clawback on their discount for the first five years after purchase.
The Effect of Family Housing History on Right to Buy Motivations
It is clear that underlying a great many of the accounts from tenants who had not exercised the Right to Buy was a lack of confidence in home buying and home ownership, either explicit or implicit. These respondents often linked their lack of confidence to a lack of home ownership in their own family background. Many respondents had little or no history of home ownership in their family history. Their families had 'always' rented housing. Yet other respondents with no family history of ownership described how the Right to Buy helped them overcome their inhibitions and buy a home for the first time.
In practice, these respondents - those who had exercised the Right to Buy - typically found the purchase process and home ownership to be easy and straightforward. The monthly costs of home ownership, including mortgage payments, were seen to be more or less equivalent to the monthly costs of renting. In these respondents' cases at least, authorities' concerns that Right to Buy purchasers might struggle to afford the full costs of home ownership had not been realised. Nevertheless, buying their first homes through Right to Buy had represented a big psychological step. Many were conscious of breaking a family pattern of non- home-ownership by doing so. Some of their accounts further suggested that Right to Buy had prompted a generational shift in their family from a culture of long-term rental to one of home ownership.
This research therefore supports the view that the Right to Buy has opened opportunities to home ownership that might not otherwise have been available, not just because it provides financial assistance in the form of a discount on market value (this aspect was rarely mentioned by respondents) but because it provides role models and confidence.
The Impact of Right to Buy
The research revealed a range of positive impacts of the Right to Buy on individual respondents and their families. The Right to Buy made it possible - or easier - for tenants to become home owners for the first time. It had a significant and lasting impact on tenants' attitudes and expectations of home ownership, providing encouragement and support to people who otherwise lacked confidence. It gave new owners, previously tenants, the freedom and motivation to carry out home improvements and repairs. Whilst some local house condition surveys have raised concerns that the ex-Right to Buy sector contains a significant level of disrepair, these respondents reported that their ex-Right to Buy properties and their neighbours' were kept in better condition than they had been when under council ownership.
For some, exercising the Right to Buy improved mobility, or the possibility of mobility in the future, should changing circumstances make moving house desirable. However, Right to Buy owners appeared less likely to expect to move house in the future than those owners who buy on the private market.
Exercising the Right to Buy was also described as impacting positively on finances, providing a sense of investment in the future, inheritance for children and financial security. Yet, compared with many home owners who buy their property on the private market, those who exercised their Right to Buy seemed more likely to view their home as a fixed resource; a place to live in, rather than a financial investment or asset.
A few older respondents who had exercised their Right to buy had already paid off their mortgages. Consequently, they found that their monthly disposable income had increased beyond what it would have been had they remained tenants, liable to pay rent indefinitely.
Last but by no means least, many of the respondents who had exercised the Right to Buy described its significant and long-lasting impact on their sense of self and their personal life.
There were also accounts of the Right to Buy scheme having had positive impacts on neighbourhoods and wider society. Generally, an increasing level of home ownership on a council estate was seen to improve the appearance and fabric of the neighbourhood and reduce the likelihood of anti-social behaviour. In some areas, Right to Buy encouraged owners to live in an area for longer and become more 'settled down'. This then made the neighbourhood more stable and increased community spirit.
However, respondents described some impacts of Right to Buy - direct or indirect - which were less positive. In particular, many respondents - especially tenants - spoke of Right to Buy having depleted rental stock. People who preferred to rent, or who needed to rent due to their personal circumstances, lost out as a result. The depletion of council housing stock was apparently exacerbated by the greater rate of purchase of the type of property, in those areas viewed as 'ideal'. Typically, these were 'family homes' with three or more bedrooms, their own front doors and gardens, in areas with good social order.
Furthermore, some respondents linked the skewed depletion of council stock to increasing polarity in the perceptions of different council estates. Experts have elsewhere reported that the distinction between 'in demand' and 'low demand' areas can be stark. This research found that such a stark distinction was recognised by some respondents, who had been able to compare and contrast neighbouring estates as they changed over the years. These respondents described how local areas where many properties had been bought through Right to Buy had improved and moved 'up market', whilst local areas where most properties remained council-owned deteriorated, both in terms of housing conditions and behaviour.
Furthermore, a few respondents claimed that this skewing and polarisation, caused or exacerbated by the Right to Buy, affected certain types of tenant disproportionately. Specifically, low income families with young children and additional babies on the way were described as being left with no choice but to make do with poor rental accommodation in increasingly rough areas. Before Right to Buy, it was argued, these tenants would have had greater opportunity to rent an ideal family home in an ideal location.
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