Investing in Modernisation - An Agenda for Scotland's Housing :9

Investing in Modernisation - An Agenda for Scotland's Housing

Housing Information And Advice
2.69 Ready access to good quality, accurate housing information and advice is an essential component of an efficient housing system. People can face difficulties in gaining access to both the rented and owner-occupied markets: information and advice are required to enable people to make informed choices and decisions, and technological developments should help with this. Even where appropriate housing has been identified, householders need access to good advice. Changes in family circumstances and income, illness and disability, or the need for repair and maintenance all create a demand for information. Homeowners are often unaware of the range of advice which might be available on issues such as energy efficiency, repair grants, dealing with mortgage arrears, etc. Tenants and landlords will need advice on their respective rights and how these can be enforced.
2.70 There is a wide range of bodies providing housing information and advice. Local authorities have statutory duties falling from their responsibilities in the fields of social work, land use planning, environmental health and building control, and there are also statutory requirements placed on landlords in both the public and private sectors. A great deal of housing information and advice is provided by voluntary agencies of varying kinds _ from Citizens Advice Bureaux who will handle consumer queries on a very wide range of issues, through to organisations which specialise in the housing needs of particular sectors of society such as homeless people, elderly people or tenants. In addition, many private sector companies provide information and advice of both a general and specific nature, either free or at a price. Such companies would include for example solicitors, mortgage advisers, financial institutions and building surveyors.
2.71 The standard of information and advice varies considerably, and there are barriers to access and geographic gaps in provision. There is a long-standing commitment to improve the scope and quality of housing information and advice throughout all housing tenures in Scotland. In September 1993 HomePoint was established within Scottish Homes as a central housing information and advice unit. Its activities are overseen by an advisory committee drawn from local authorities, voluntary agencies, legal and financial organisations.

2.72 HomePoint has: researched a range of housing/consumer issues; established and reviewed a baseline of housing information and advice provision in Scotland; published national standards and good practice for housing information and advice; published guidance on the production of local strategies for housing information and advice; provided grants for innovative projects; and, raised awareness and disseminated good practice.
2.73 We consider that there is scope to build on the platform established by HomePoint and last year we invited Scottish Homes to prepare a framework for a national strategy for housing information and advice. In September 1998 a discussion paper was published seeking views on a range of issues, including the proposition that Scottish councils could take a strategic lead in their areas to secure high quality information and advice services for all residents. This effort would be supported at a national level by HomePoint. Responses were invited by 19 February 1999 and we hope that it will be possible thereafter to reach a consensus on the way ahead.

Encouraging Sustainable Home Ownership
2.74 As a result of the rapid growth in owner-occupation in Scotland in recent years home ownership is no longer largely the preserve of the most affluent. Right to Buy sales and resales and various low cost home ownership initiatives have helped to increase the number of home owners across the social spectrum. A very large proportion of Scottish households aspire to home ownership, and we are keen to support them in realising this ambition whenever the financial circumstances of the household make this a sensible option.
2.75 Experience in England suggests that high levels of owner occupation can lead to difficulties during periods of recession when there is a much greater risk of mortgage default and repossessions, with households with lower or more irregular incomes likely to be the most at risk of falling out of home ownership. The Government has therefore asked mortgage lenders to provide more flexible mortgages and better mortgage payment protection insurance to protect families in an increasingly flexible labour market. Over recent years, however, the rate of repossessions in Scotland has been fairly constant at just over 0.2% each year, and although this is substantially less than the rate in England, each repossession is a personal tragedy for those concerned. So while the Government will support the desires of those who wish to acquire their own homes, it does not wish to encourage into owner occupation households whose incomes are too low or too irregular to meet the costs involved.

Scottish Homes Low Cost Home Ownership Schemes
2.76 Scottish Homes currently has a number of grant schemes designed to encourage low cost home ownership. These schemes can be divided into those designed to stimulate demand for owner-occupation, and those which seek to increase the supply of houses for sale. The demand-side grants give certain Scottish Homes and housing association tenants a cash incentive to buy the home they currently occupy or to purchase a property on the open market; the supply-side measures offer grant assistance to housing associations, private developers and individuals to provide new or improved housing for sale. Between 1989 and the end of September 1998, Scottish Homes spent over Ł20 million on cash incentives to encourage tenants to move into owner-occupation and over Ł400 million on assisting housing associations and private developers to provide over 25,000 houses for sale.
2.77 These schemes have played an important role in recent years in encouraging low cost home ownership and diversifying single tenure estates. However, the schemes have been developed to meet a range of different needs and objectives, for example to provide incentives to tenants to buy their own homes, to promote shared ownership or to encourage owner occupation in rural areas. While many of the objectives for these schemes remain valid, and they have often attracted private developers to areas which may otherwise have been neglected, their piecemeal development has led over time to an unduly complex and unwieldy programme. It is clear that there is now a need to review the objectives and targeting of these schemes to make better use of the resources available.
2.78 The prime need is to focus resources on areas - both urban and rural - where incentives are needed to stimulate housing improvements as part of a broader social inclusion strategy, with the aim of creating multi-tenure - and more sustainable - communities. In most cases, this is likely to be achieved by incentives which particularly help first-time buyers get on to the "first rung" of the housing market. In urban areas the aim should be to broaden the social composition of local communities; in rural areas the objective is more likely to be to provide affordable housing to help retain young households in the local community.
2.79 We therefore asked Scottish Homes to consider how best to simplify the range of schemes provided to achieve a programme which will deliver a flexible and cost-effective approach to sustainable home ownership for Scotland. We have specifically asked Scottish Homes to phase out the various cash incentive schemes (which, currently, only account for a limited expenditure) and to consider the scope for developing an Equity Loan Scheme under which the purchaser is given an interest free loan towards a percentage of the value of a house, as a possible replacement, in due course, to the existing shared ownership schemes.

Views are sought on the proposed targeting of Scottish Homes' assistance for owner-occupation.

Flexible Tenure
2.80 A number of relatively small, local schemes have been developed, in Scotland and south of the Border, to help owner occupiers who are facing financial difficulties to become renters or to unlock the equity in their properties. These are sometimes known collectively as "flexible tenure" schemes although they vary considerably in how they operate in practice. They can, for example, allow households with shared ownership properties to "staircase down", i.e. reduce their ownership share, or allow elderly owner occupiers on low incomes with houses in poor condition to become tenants or shared owners with a housing association. The Scottish schemes allow owner-occupiers who are in arrears with their mortgage payments or otherwise at risk of repossession to sell their houses at 85% of open market value providing this is sufficient to repay the existing loan and carry out any essential repairs. The occupier continues to live in the house paying rent under an assured tenancy with a right to re-purchase if their circumstances improve. These existing schemes operate without subsidy.
2.81 The Government believes that there is a case for encouraging the development of further flexible tenure schemes in Scotland and has asked Scottish Homes to commission research to allow the possible options to be reviewed in more detail. As well as helping owner-occupiers threatened with repossession, there is also the possibility that a flexible tenure scheme might help elderly owner-occupiers on low incomes who would like to release equity in their properties to carry out essential repairs. However, any proposals involving the use of public funds would need to be considered carefully in the light of competing priorities and to ensure that the resources were well targeted. It is also important to ensure that flexible tenure schemes do not encourage households with insufficient resources to sustain owner occupation to become owner-occupiers, or existing owner-occupiers to neglect their responsibilities. There will be a need for consultation on any specific proposals that might arise out of the Scottish Homes' research.

Views are sought on the need for further development of flexible tenure schemes in Scotland.

The Right to Buy
2.82 Since its introduction in 1980, the Right to Buy has been exercised by over 350,000 public sector tenants, bringing about a massive shift in housing tenure. It has created unparalleled opportunities for many households to achieve their aspirations to own their own homes. It has also given them much greater say in the way in which they look after their homes.
2.83 However some new owners have found it difficult to keep up with all the costs of home ownership, particularly when faced with high repair costs. There have been particular problems in cases where expensive communal repairs are required in blocks of flats jointly owned by the local authority and Right to Buy purchasers. The existence of houses sold under Right to Buy can also create difficulties for local authorities who wish to carry out a comprehensive programme of repairs or modernisation work. More generally, much of the most attractive public sector housing in areas of high demand has been sold and there are now shortages of rented housing in some localities, particularly in rural areas.
2.84 In response to these difficulties, the Government has already consulted on and announced changes to the "cost floor" rules which limit the amount of discount to prevent the sale price falling below recent expenditure on the house by the local authority. The proposals were generally well received by those responding to the consultation exercise and would help to safeguard public investment in acquiring, improving and maintaining the social housing stock.
2.85 There may be however be a case for further and more wide-ranging changes in the Right to Buy scheme. The aim would be to strike a better balance between the aspirations of those tenants who would like to buy their house and the need to obtain value for money and protect the interests of the community as a whole. Possible changes that the new Scottish Executive might consider could include reducing or limiting the levels of discount available to purchasers; reviewing the qualifying period needed before a tenant becomes eligible to buy their home; and extending the powers available to local authorities to exempt certain houses, or houses in particular areas, from the Right to Buy.

Views are sought on the need for further changes on the Right to Buy scheme and on the type of changes that should be considered in more detail by the new Scottish Executive.

Improving the Home Buying Process
2.86 Under the Scottish system of home buying and selling, the seller invites offers from interested prospective buyers and a legally binding contract is created as soon as an offer is accepted and all the terms and conditions of the sale are agreed. It is widely accepted that this system has a number of strengths. It minimises the time required before sales can be completed which, in turn, helps to avoid lengthy periods of uncertainty for buyers and sellers. Scotland has also largely managed to avoid the problems of 'gazumping' when sellers renege on the original agreement to accept another offer and 'gazundering' when buyers withdraw and buy another property. There are also few problems associated with chains of interdependent sales when difficulties with one sale can create delays for many other buyers and sellers. Recent research commissioned in connection with the review of ways of streamlining the house buying process in England and Wales suggested that the overall time taken to buy a house in Scotland was substantially less than south of the Border and that 83% of buyers in their Scottish sample were either very satisfied or fairly satisfied with the process.
2.87 However, there is some concern that, in a buoyant market, when several potential buyers may be competing for the same house, the system leads to multiple surveys and valuations being commissioned on the same property with considerable abortive costs for the unsuccessful bidders. It has been suggested that this problem could be overcome if the seller was required to commission a valuation and survey on his house and make this available to all prospective purchasers who might be interested in making a bid. It has also been suggested that sellers should be required to include an assessment of the energy efficiency rating of their house as part of the survey possibly with advice on measures that could be taken to secure improvements.
2.88 The proposal for a mandatory seller's survey and valuation might help to avoid abortive surveys, but a number of commentators have pointed to potential drawbacks. They argue that surveyors acting for sellers would not be encouraged to actively seek out defects and that it might be necessary to change the law of negligence to ensure that there was a duty of care owed by the seller's surveyor to the purchaser. It is also possible that lenders would require their own valuation, to be paid for by the buyer, irrespective of whether the seller had commissioned a valuation and some purchasers might be unwilling to trust a seller's survey and decide to commission their own independent survey.

Views are sought on ways of avoiding the problem of multiple surveys and valuations in Scotland and, in particular, on the proposal to require sellers to commission a survey and valuation and make this available to all prospective buyers.

Tackling Neighbourhood Nuisance and Anti-Social Behaviour
2.89 Neighbourhood nuisance and anti-social behaviour can make life intolerable for too many ordinary, decent households. Often it is persons living in the more deprived areas that suffer most from excessive noise, damage, vandalism and crime. All householders are entitled to enjoy peaceful, safe domestic lives unhindered by the activities of their neighbours. Tackling neighbour nuisance and anti-social behaviour requires co-ordinated action by a number of agencies including the police, but landlords have an important contribution to make.
2.90 As part of a concerted programme of measures to enhance community safety, new measures to tackle neighbour nuisance and anti-social behaviour were introduced under the Crime and Disorder Act 1998. Local authorities will soon be able to apply to the courts for anti-social behaviour orders, specifically designed to tackle anti-social behaviour irrespective of the housing tenure of the perpetrators. The Act also introduced additional powers for the police to seize noise-making equipment which is disturbing neighbouring households, and brought in wider eviction powers for use in carefully prescribed circumstances to help landlords take tough action to deal with drug dealers in particular.
2.91 In addition to these new statutory powers, a major new circular of guidance from the Scottish Office on housing and neighbour problems was published last November (following consultation in the Spring), stressing the importance of inter-agency and inter-departmental co-operation in tackling neighbour problems.
2.92 There are also further measures which would be worthwhile candidates for future consideration by the Scottish Parliament. In particular, these measures would make it possible for local authorities, using their discretion in certain defined circumstances, to offer a probationary tenancy instead of a secure tenancy and to suspend the Right to Buy from anti-social tenants while eviction proceedings are taking place, in line with the position in England and Wales.

Encouraging Housing Providers to Play a Wider Role in Local Communities 2.93 The housing association movement, particularly community based housing associations and co-operatives, has played a pioneering role in community development in Scotland. Mostly their activities have focused on the provision, improvement and management of housing and this is discussed in more detail in Chapter 3, but some housing associations have also sought to develop a wider role in the areas in which they operate. Examples of these activities include the provision of workspaces in the local community, encouragement to local firms to provide training or apprenticeships, providing support, services and meeting places for community groups and running community or day centres.
2.94 In addition to the activities of housing associations, there have also been a number of local employment and training initiatives linked to particular housing projects which have been taken forward by other bodies such as local employment agencies and local authorities. For example, in Forgewood in Motherwell a local employment and training initiative was established in the early 1990s, based on partnership between the local community and a number of funding agencies, to seek to secure employment and training for local unemployed people linked to a programme of housing renewal. It also helped to establish a community business to provide security, landscaping and cleaning services. In Castlemilk and the Gorbals areas of Glasgow, Construction Project Managers have been appointed to seek to maximise local economic benefits from housing regeneration expenditure.	A wider role: training and employment opportunities in Easterhouse.

Using Housing to Create Training and Employment Opportunities
2.95 A recent review⁴ of various community based housing and local economic regeneration initiatives, primarily in Scotland but also taking account of experience south of the border, concluded that housing providers can contribute to local economic regeneration both through their activities and their assets and expertise. In particular, it stressed that repair and maintenance works can offer a secure and accessible market for the services of local small businesses and that the development and management of workspaces can make a significant contribution to creating or extending the network of local small businesses. It also emphasised the importance of housing providers working in partnership with other bodies, with local economic development expertise, to ensure that schemes enhanced the skills of local people and the competitiveness of local businesses.
2.96 The Government's Welfare to Work programme and, in particular, the New Deal for 18-24 year olds offers a number of opportunities for housing providers. For example, New Deal funding through the Environment Task Force can be used for capital and other projects such as cleaning up open spaces; housing providers can offer employment to New Deal beneficiaries under the Employment Option receiving a subsidy of Ł60 per employee per week; and they can provide or work with other agencies to provide training opportunities for residents under the Full Time Education and Training Option. Housing is well placed to provide opportunities under the New Deal and we encourage housing providers to think creatively about ways in which they might use these opportunities to provide benefits for their local communities. Chapter 3 explores some of the ways in which the extension of Community Ownership might further open up local opportunities of this nature.

Views are sought on the best ways for ensuring that new housing investment and other local housing expenditure contributes to community economic development and, in particular, on effective ways to encourage and support contractors operating in disadvantaged communities to train and employ local people, using New Deal and other employment initiatives.

Local Service Delivery and "Working for Communities"
2.97 Some housing associations may be interested in extending their work into other forms of service delivery in the areas in which they operate, particularly if these are closely linked to housing. For example, they may consider that they could have a role to play in managing community centres or local play facilities. Under New Deal for communities in Scotland, we have launched the "Working for Communities" programme. This is testing out new ways of delivering services at the local level in a more flexible, co-ordinated way which is responsive to the needs of local communities. Two early pathfinders were set up last year and proposals for further pathfinders have been invited from a selection of partnerships in urban and rural areas to run over the next three years. We hope that a number of local housing associations will become involved with such partnerships in bringing forward pathfinder proposals.

The Scope for Housing Associations to Develop a Wider Role
2.98 Where housing associations have been active in involving and empowering local residents and can draw on a substantial reservoir of energy, commitment and skills in their areas, they should be well placed to take forward "wider role" initiatives. These initiatives might be linked to local economic development, to local service delivery, or both. However, not all housing associations will want to develop a wider role and this is certainly not something that should be forced on them. Careful planning will be required to prepare the ground, to identify good projects of real benefit to the local community and possible funding sources, and to create structures that ensure, if projects do not work out entirely as planned, that this will not undermine their housing activities. The Government recognises that those housing associations that are interested in developing a wider role will need help and support. Scottish Homes will have a role to play both in providing advice directly, for example on how they need to adopt their structures and management rules, and in providing contacts with other agencies with relevant expertise.

Views are sought on the scope for encouraging housing associations to develop wider activities and the role this could play in helping to promote social inclusion.

Conclusions
2.99 This Chapter has described a range of policy initiatives which are designed to ensure that we make real progress in improving housing conditions in Scotland while, at the same time, contributing to broader aims such as promoting social inclusion and protecting the environment. Views are welcomed on the policy initiatives described in this Chapter and, in particular, on:
the need for a wide-ranging review of national and local policies on homelessness and the ways these are implemented, based on improved information and research on the causes and nature of homelessness in Scotland at the present time (paragraph 2.17); the role that foyers might play in tackling homelessness in Scotland (paragraph 2.19); whether greater priority should be given within existing programmes to adaptations to existing homes (paragraph 2.27); whether Care and Repair should continue to receive priority in the allocation of resources with a view to establishing projects, in due course, in all parts of Scotland (paragraph 2.29); whether barrier free standards should be mandatory for all new housing, or for all new housing supported by public funding (paragraph 2.34); the case for increasing the priority given to flexible support rather than support tied to a specific project (paragraph 2.36); how housing and housing design might benefit from a policy on architecture (paragraph 2.45); additional planning measures that may be required to ensure good quality housing for all (paragraph 2.51); the need for additional powers for local authorities to tackle below tolerable standard housing (paragraph 2.60); the case for reforming the improvement and repair grant system by bringing in a test of resources and supplementing or partially replacing grants with loans and how these arrangements might work in practice (paragraph 2.63); the case for giving local authorities more discretion in the amount of financial assistance provided to owners who are required by the local authority to undertake improvements or repairs to their houses (paragraph 2.64); the need for changes in Scottish Homes' schemes for encouraging owner-occupation (paragraph 2.79); the need for further development of flexible tenure schemes in Scotland (paragraph 2.81); the need for further changes in the Right to Buy scheme (paragraph 2.85); ways of avoiding the problem of multiple surveys and valuations in Scotland and, in particular, on the proposal to require sellers to commission a survey and valuation and make this available to all prospective buyers (paragraph 2.88); ways of ensuring that new housing investment and other local housing expenditure contributes to community economic development and, in particular, effective ways to encourage and support contractors operating in disadvantaged communities to train and employ local people, using New Deal and other employment initiatives (paragraph 2.96); and, the scope for encouraging housing associations to develop wider activities (paragraph 2.98).

Footnotes
1 Assistance is available from local authorities through the repairs grant system to replace lead plumbing where the lead level in drinking water is above the specified legislative standard. Assistance is also available to reduce exposure to radon in affected areas identified through radon surveys commissioned by the Government. 2 Kenneth Gibb and Margaret Keoghan, 'Backwards Linkages from Construction', Local Economy, Vol.13, No.3 (December 1998) 3 Part 2 of the Guidance, on Housing with Integral Support, is due to be published in February 1999 and together the two parts will replace the design guidance in the Scottish Housing Handbooks, volumes 5, 6 and 7 (Housing for the Elderly, Housing for the Disabled and Housing for Single People, Shared Accommodation and Hostels). 4 Alan MacGregor and Hiland Ritchie, Community Based Housing and Local Economic Regeneration: A Guide to the Potential (February 1998). Chapter 2