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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. Since then, much quantitative information has been gathered on the subject, however little was known about the views and experiences of Right to Buy among tenants and purchasers. In October 2005, the Scottish Executive commissioned BMRB Scotland to undertake in-depth qualitative research to provide greater insight.

Main Findings

• One of the major factors behind respondents choosing to purchase or not to purchase under Right to Buy was the suitability of the location and type of property rented from the council.
• The option to purchase under Right to Buy was viewed by some tenants as unrealistic, due to their lack of employment, or low or irregular income.
• Many tenants had only a vague understanding of the Right to Buy, the level of discount offered and their own eligibility.
• Family history of home ownership was seen to exert a powerful influence on attitudes, expectations and behaviours regarding home ownership. Many respondents had little or no family history of home ownership. Often, purchasers were conscious of the Right to Buy enabling them to break a family pattern of non-home ownership.
• Purchasers generally found the process of purchasing their home under the Right to Buy to be straightforward. After the purchase, they found the costs associated with home ownership easily manageable. However for many tenants, the costs and responsibilities associated with home ownership - vaguely imagined - were viewed as a barrier to exercising the Right to Buy.
• Respondents described the Right to Buy impacting on both individuals and communities. For individuals exercising the Right to Buy, impacts included changes in attitude and expectations towards home ownership, increased sense of freedom, ability to undertake home improvements and a sense of financial stability. For some communities, the Right to Buy had improved their neighbourhood socially and structurally. However negative impacts, such as reduced rental housing stock and declines in other neighbourhoods were also viewed as impacts of Right to Buy.

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)

Research Findings

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 ideal. Indeed, location was the most important factor for many. An ideal location was, first and foremost, one where the local neighbourhood was characterised by good social order and a lack of anti-social behaviour.

Location, which is always critical in house purchase decisions, was absolutely vital to tenants when considering the Right to Buy, but for very different reasons: the tenants were primarily interested in areas they would be happy to live in rather than resale potential.

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.

Respondents reported that the uptake of the Right to Buy was seen to have depleted the council stock in ideal areas, making tenancies in those areas - and therefore opportunities to buy - difficult or impossible to acquire.

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, although 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.

The costs of home ownership were thought to be a significant barrier by many tenants who had not yet bought. Some tenants mentioned financial limitations, such as irregular or low income and stability of employment, or having no income other than benefits: they predicted that this would make them ineligible for a mortgage. Debts were also raised as an issue. 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.

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.

The Effect of Family Housing History on Right to Buy Motivations

The findings suggest that family housing history can exert a powerful influence on attitudes, expectations and behaviours regarding home ownership. Many of the respondents had come from family backgrounds where there was no, or little, history of home ownership. Their parents, aunts, uncles and grandparents had rented their housing either from the council or from private landlords. This lack of previous home ownership in a respondent's family background often inhibited respondents from purchasing, rather than renting, a home.

Some tenants explained that this lack of history, or an associated lack of confidence, was one of the reasons why they had not exercised their Right to Buy. However, many Right to Buy purchasers similarly had no, or little, family history of home ownership yet had bought a home - often for the first time - through the Right to Buy. Often, they were conscious of breaking a family pattern of non-home ownership by doing so. Many described how this represented a big psychological step - one they had been encouraged to take by observing relatives' or neighbours' experiences of Right to Buy.

These accounts suggest that, for some families, Right to Buy has prompted a generational shift, from a culture of long-term rental to a culture of home ownership.

Experiences of Exercising the Right to Buy

In practice, those who had exercised the Right to Buy typically found both 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. From the outset of the Right to Buy, there were some concerns from authorities that purchasers would not be able to afford the full costs of home ownership. However, the research suggests that the purchasers interviewed appeared quite relaxed about their housing costs.

This research 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, the research found that although Right to Buy purchasers were aware of the costs of repairs and maintenance, they tended to take these in their stride. 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.

However, a number of potentially crucial repairs-related issues did not come through in the research:

• The cost of general repairs
• The cost and management of communal repairs
• The inability to participate in improvement programmes

One clear theme that runs through the Right to Buy purchasers' commentaries is that buying their house afforded them freedom, in a number of respects. This included freedom to:

• Improve their property
• Move
• Stay in their house
• Benefit financially
• Self-improvement

For some, exercising the Right to Buy improved housing mobility, or the possibility of mobility in the future, should changes in 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, particularly in terms of 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.

The notions of investment were very different for Right to Buy purchasers than for other owners. Despite the potential for significant capital gain presented by the Right to Buy discount, the purchase was discussed in terms of investing in their, or their family's future.

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.

Impacts on Communities

There were 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'.

Moreover, 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.

This is often linked to the profile of the stock; areas typified by low rise family housing, and especially three and four bedroom housing, detached, semi-detached and, to some extent, terraced housing and four-in-a-block housing are generally considered high demand. On the other hand, local authority areas with one and two bedroom properties in multi-storey blocks, tenements, and other high density housing, are typically less in demand.

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 inadequate rental accommodation in increasingly rough areas. Before Right to Buy, it was argued, these tenants would have had greater opportunity to rent a family home in an ideal location.

A further consequence of Right to Buy in lower demand properties is the movement of Right to Buy properties onto the private rented market. Other evidence has suggested that these are typically properties in lower demand areas or 'hard to let' type stock. The rents charged by the private landlords may be higher than council rents for adjoining properties, yet screening of tenants may be less scrupulous; and the quality of properties and of landlord services poorer. Some limited mention of this was made in the research. As yet there is little detailed evidence of this trend in the broader literature but local authorities are becoming aware of these issues and looking for approaches to investigate them systematically.

If you wish further copies of this Research Findings or have any enquiries about social research, please contact us at:

Tel: 0131 244 0874
Fax: 0131 244 7573
Email: socialresearch@scotland.gsi.gov.uk
Website: www.scotland.gov.uk/socialresearch

If you wish a copy of "Views and experiences of Right to Buy amongst tenants and purchasers" the research report which is summarised in this research finding, please send a cheque for £5.00 made payable to:

Tel: 0131 622 8283 / 0131 622 8258
Fax: 0131 622 8258
Email: business.edinburgh@blackwell.co.uk

This document (and other Research Findings and Reports) and information about social research in the Scottish Executive may be viewed on the Internet at: http://www.scotland.gov.uk/socialresearch

The site carries up-to-date information about social and policy research commissioned and published on behalf of the Scottish Executive. Subjects covered include transport, housing, social inclusion, rural affairs, children and young people, education, social work, community care, local government, civil justice, crime and criminal justice, regeneration, planning and women's issues. The site also allows access to information about the Scottish Household Survey.

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