SCOTTISH EXECUTIVE

A New Single Social Housing Tenancy for Scotland: Rights, Obligations and Opportunities

Our vision for housing in Scotland is that we should seek to achieve economically and socially mixed communities in which there is a variety of housing types and tenures. Housing needs to be more locally controlled, better managed, and more effectively provided. Achieving this vision will require both community and individual ownership initiatives. Our broader vision is that better housing will sustain stronger communities.

Over the last 20 years, the public and social housing sectors have become increasingly fragmented with different pricing, investment and tenancy rules. Achieving our vision affords the opportunity of a more strategic approach. In making this change, the distinctively Scottish community based housing associations and tenant management co-operatives provide a model of community ownership and management which we seek to extend across the socially rented sector.

Bringing Tenants Together

At present, the social housing sector in Scotland involves the vast majority of tenants covered by Secure Tenancies (councils and Scottish Homes tenants), others covered by Assured Tenancies (post-1988 association tenants) and a reducing number of households covered by Fair Rent legislation (pre-1989 association tenants). The integration of social renting would be substantially enhanced by the creation of uniform tenancy rights and obligations, or a Single Social Tenancy, across all these sectors. We have taken the view that it would be unfair to standardise arrangements by removing entitlements already available to the majority of tenants and propose, therefore, to standardise tenancy arrangements building upon the secure tenancy, which has the strongest tenants’ rights, including the right to buy (RTB). These proposals will offer Scottish tenants the strongest ever tenant’s rights package available to all social tenants in Scotland.

Over the last 20 years the owner occupied sector has grown from 35% to 60% in Scotland, primarily through the right to buy, and the council sector has shrunk from 50% to less than 30%. There has also been a profound cultural change. Most Scots — 83% in the most recent survey — now wish to own their own homes. Our housing policy should aim to take forward both community ownership and individual ownership. Our vision is that communities should provide the choice for individuals to continue to live in the same community as their circumstances change. This means providing access to owner occupation and to social renting within communities.

Two major factors will need to be overcome if this mix is to be achieved. Firstly the large mono-tenure estates in many cities and urban areas do not and indeed cannot provide for the aspirations of those who want a greater say in the ownership and management of their housing. Secondly, the under provision, and in some instances absence, of social rented housing in other areas — particularly in rural Scotland — must be tackled. The forthcoming Housing Bill provides the opportunity to take a strategic approach to address both imbalances

From Problem to Solution

A key foundation for this more balanced approach will be a strategic right to buy - modernised for 21^st Century, re-designed to support the development of mixed communities in all parts of Scotland. Our firm view is that we should seek to use the opportunity of the Housing Bill to modernise the right to buy for tenants in order to capture its benefits whilst alleviating its adverse effects on others; to make it relevant to the circumstances of the twenty-first century. We propose to achieve this by:

providing a common right to buy for all tenants covered by the single social tenancy - this implies extending the right to buy to all tenants of social landlords except those who have charitable status - we estimate that some 43,000 housing association tenants currently without the right to buy would acquire it.

continuing to apply the recently revised cost floor rules so that for new houses or those which have benefited from major repairs and modernisation work, the discount available can be reduced for up to 10 years after the work is carried out. The Cost Floor limits the level of discount when the landlord has invested more than Ł5,000 in the property in the previous 10 years. These rules were amended with effect from 1 April 1999, extending the relevant period from 5 to 10 years and allowing landlords to include significant repairs and maintenance costs in the calculation for the first time.

reviewing the need for capping discounts to prevent large windfall gains by some tenants (although the available evidence suggests that few right to buy purchasers in Scotland have benefited from relatively large discounts of over Ł30,000. In 1998 some 3% of sales included discounts of over Ł30,000).

exempting from the right to buy a wider range of houses provided specifically for those with special needs (at present only sheltered housing and certain other houses with special features for the elderly are exempt).

developing a mechanism to allow all right to buy purchasers to join a factoring scheme operated by the former social landlord which ensures that they make regular contributions towards the cost of necessary repair and maintenance. This proposal would link with other planned changes in property legislation stemming from the recommendations of the Scottish Law Commission on the law of the tenement and the law on real burdens.

ensuring that no one area is in future disadvantaged by the extension of the right to buy by re-aligning the Scottish Homes Development Budget including the provision of 18,000 new houses over the next three years, with the objective of creating mixed communities in all parts of Scotland, and in particular strengtheningthe socially rented sector in rural Scotland.

ensuring that adjustments to the right to buy do not create significant problems for the capacity of social landlords to borrow to fund new developments.

developing the housing planning function within local authority areas and ensuring effective links to the development plannng process.

We believe that a modernised right to buy along these lines will be seen as fair by tenants and will address the main problems arising out of the current arrangements. It avoids the arbitrary and unjustifiable difference of treatment between "secure" and "assured" tenants, creates a mechanism for ensuring that right to buy owners contribute their share to common repairs and allows for a better balance than at present between the public interest and the rights of the individual tenant.

This paper has 2 main objectives. First, we wish to set out the new tenancy arrangements and explain why they have been chosen. Secondly, we identify some of the implications for individuals and organisations of the new single social tenancy and the accompanying strategic approach towards new build designed to support the emergence of balanced communities throughout Scotland.