Annex B-Changes to the Right to Buy in Scotland - a summary
The Tenants' Rights, Etc. (Scotland) Act 1980 introduced the Right to Buy to tenants of local authorities, New Town Development Corporations, the Scottish Special Housing Association and Housing co-operatives. This Act also introduced the secure tenancy, which was a prerequisite for having the Right to Buy.
The key features of the Right to Buy at that time were:
- qualifying period of three years;
- minimum discount of 33% after three years, rising with length of tenancy by 1% each year to a maximum of 50% after 20 years;
- tenants had a 'Right to Loan' of 100% of the purchase price from the local authority landlord;
- the right to buy at a fixed price - upon payment by the tenant of £100, the property price was frozen for two years; and
- disincentives for the buying tenant to sell on the open market, by the 'clawback' of discount from resale after three years.
The Tenants' Rights, Etc. (Scotland) Act 1980, Amendment Act 1980 then introduced a power for Ministers to refuse to sell amenity houses (houses intended specifically for the elderly), later consolidated as section 69 of the Housing (Scotland) Act 1987.
The Local Government (Miscellaneous Provisions) (Scotland) Act 1981 introduced:
- a Vesting Order to bring into being a tenant's Right to Buy where the landlord was not the heritable proprietor; and
- drafting amendments to fixed price option (subsequently repealed).
The Tenants' Rights, Etc. (Scotland) Amendment Act 1984:
- reduced the qualifying period from three years to two years;
- increased the maximum discounts from 50% to 60%;
- extended the list of previous selling landlords to allow tenants to maximise their qualifying periods and discounts;
- repealed section 10 of the 1980 Act, which had restricted Right to Buy applications to one per year; and
- introduced a power for Ministers to refuse to sell houses required for educational purposes.
The Housing Defects Act 1984 designated certain non traditional house types as defective and introduced some financial assistance for buyers who had purchased such houses.
The Housing (Scotland) Act 1986:
- increased starting discounts for flats, from 32% to 44% after two years, rising to a maximum of 70% after 15 years;
- extended the Right to Buy to housing associations, but subject to many exemptions (such as registered charities as at 14 November 1985);
- gave secure tenancies to tenants of Regional Authorities (Police and Fire authorities) and so extended the scope of Right to Buy;
- introduced a requirement for landlords to stop inducing tenants to opt out of the Right to Buy; and
- introduced a right for the tenant to buy with a member of the family as joint purchasers.
The Housing (Scotland) Act 1987 was primarily a consolidation which repealed and amended housing legislation from 1914 until 1986.
The Housing (Scotland) Act 1988 amalgamated the Scottish Special Housing Association and the Housing Corporation to form new landlord Scottish Homes, which also regulated housing associations and developed them through grant aid. Scottish Homes was added to list of qualifying landlords for the Right to Buy.
The 1988 Act also introduced:
- the Right to Buy 'cost floor' rules, which set out a method of calculating the sales price of a property by taking into account construction or major improvement works over the past five years;
- a power for Scottish Homes to create a cash incentive scheme - this was a voluntary scheme operated by housing associations whereby tenants aspiring to home ownership were given a grant of up to £10,000 to buy in the private sector (local authorities can devise such schemes today); and
- the 'Tenants choice' - the right for public sector tenants to transfer to another landlord (but not a local authority landlord). From 2 January 1989, however, new housing association tenants moved to the assured tenancy, and therefore did not have a Right to Buy.
The Local Government and Housing Act 1989
- limited the impact of section 69 of the Housing (Scotland) Act 1987 (consent to refuse to sell special needs housing) by introducing a cut off date of 1 January 1990; and
- introduced the right for a family member who succeeded to a tenancy, provided it was their principal home, to count their period of occupancy towards the qualifying period and discount entitlement.
The Leasehold Reform, Housing and Urban Development Act 1993 introduced the statutory Rent to Mortgage scheme, aimed at tenants who were unable to afford to buy outright under the traditional Right to Buy scheme, but who could otherwise pay the equivalent of their rent towards the purchase (a mortgage) and defer the remainder until they could pay this sum or until the house was sold. Tenants receiving housing benefit payments were specifically excluded from the scheme.
The changes made to the Right to Buy by the 1993 Act were:
- Tenants were allowed to offset rent paid against the property purchase price, subject to specific timeframes, to discourage landlords from delaying Right to Buy sales; and
- The requirement for periods of tenancy to run continuously, for qualifying period and discount purposes, was removed.
The Housing (Right to Buy) (Cost Floor) (Scotland) Order 1999 changed the cost floor rules by extending the period in which construction of major improvement works had occurred from five years to ten years. It also introduced a new requirement whereby the relevant costs in determining the cost floor included any repair costs over £5,000 which had been incurred over the past ten years.
The Housing (Scotland) Act 2001 made significant changes to the Right to Buy. It introduced a new 'modernised' scheme which applied to all new tenants from 30 September 2002 and to most tenants transferring to another property from that date. The key changes to the Right to Buy were:
- the qualifying period was increased from two years to five years;
- the starting discount after five years was reduced from 33% (houses) or 44% (flats) to 20% for all properties;
- the maximum discount was reduced from 60% (houses) or 70% (flats) to 35%, and a cap of £15,000 was introduced;
- Ministers were given a power to alter discounts by area, including the starting and maximum discounts as well as the increasing entitlement structure;
- the Right to Buy was suspended for tenants with an Anti-Social Behaviour Order, or with rent or council tax arrears;
- 'pressured area' designations were introduced for the first time - these enabled local authorities to apply to Ministers for approval to suspend the modernised Right to Buy, for a period of up to five years, in designated areas of housing pressure;
- the Right to Buy was extended to RSLs, but it was suspended for ten years until 30 September 2012, with powers for Ministers to extend the suspension for a further ten year period;
- landlords could apply for consent to refuse to sell properties which were due to be demolished;
- a requirement was placed upon Ministers to publish a report on the impact of the Right to Buy within four years of its implementation ( i.e. by 30 September 2006); and
- the need for continuous occupation to meet eligibility and for discount purposes was re-introduced, but this only applied to tenants under the modernised Right to Buy scheme.