Right to Buy
I invite Malcolm Chisholm to make his statement on the right to buy.
Presiding Officer, as you know, I wrote to George Reid this morning expressing my regret that copies of the report "The Right to Buy in Scotland—Pulling Together the Evidence: A report to Parliament on the effect of the Right to Buy in practice" were issued by the printer to a few housing stakeholders at 3 o'clock yesterday afternoon. That was an error, as my officials had instructed the printer to dispatch the report to those stakeholders at 3 pm today. When we found out about the error, we received undertakings from all the stakeholders that they would not comment on the report before my statement today. As I said, I regret deeply what happened.
The background to the report lies in the Parliament's first major piece of housing legislation after devolution: the Housing (Scotland) Act 2001, which made significant changes to the social rented housing sector. At that time, it was the will of the Parliament that major changes should be made to the right to buy to respond specifically to Scottish circumstances. The legislation acknowledged that there remained many people who wished to buy their homes and continue to live among their communities, but also acknowledged that a better balance was required between the needs of the community and the benefits that individual tenants received from discounts. As a result, discounts were substantially reduced. In the past, they had been as high as 70 per cent, but the 2001 act reduced them to a maximum of £15,000 or 35 per cent, whichever is lower. Existing tenants had their discounts protected, provided that they retained the tenancies that were in place at the time. The right to buy was also extended to tenants of non-charitable housing associations, but those tenants had their rights suspended until 2012 to allow associations time to prepare for the extension.
Although the right to buy was the subject of review and refinement in 2001, Parliament saw the need for a further report on its effects. Therefore, the 2001 act contained a statutory requirement for the Scottish ministers to report to Parliament on the effects of the right to buy by the end of September this year. The legislation set out clearly the information that had to be provided. The report that I publish today meets that specification. In it, members will find evidence on the extent to which tenants have exercised the right to buy together with a comprehensive look at the effect of the right to buy on the nature and condition of the housing stock in Scotland. Furthermore, the report considers the effects of the right to buy on the needs of those who require housing, as well as on the demand for housing accommodation and its availability.
Those specific requirements demand a detailed report that considers a broad range of evidence and which is based on facts—it is not a review of our policy on the right to buy. Although valuable research has been conducted on the topic, much of it preceded the significant legislative changes in 2001. Now, possibly for the first time in a purely Scottish context, we have a comprehensive and detailed picture of the evidence on the right to buy in Scotland on which we can all rely.
I am pleased that the report presents all the evidence in a clear and objective fashion, and I hope that that is recognised by those with an active interest in the subject. The report draws on recent evidence provided by the wider housing stakeholder community. I welcome that input, particularly the evidence from the Scottish Federation of Housing Associations, the Chartered Institute of Housing in Scotland and Shelter Scotland, all of which commissioned work on the right to buy. Our key stakeholders, including local government, have also participated in seminars on the report. I am grateful to them for their time and contributions.
I turn to the report itself. It contains a range of findings, and I can touch on only some of the key conclusions here. First, there is the trend in sales. Nearly half a million sales have taken place in Scotland since the right to buy was introduced in 1980. Sales peaked in the late 1980s and to a lesser extent four or five years ago. Those high numbers of new homeowners mean that more than 67 per cent of Scottish households are now owner-occupied. That is almost double the proportion prior to the introduction of the right to buy. Around half of the households that have moved into home ownership have done so as a result of the right to buy. For many years, more homes were being sold to sitting tenants than being built, but that trend has changed recently, with right-to-buy sales declining and new build—both in the private sector and of affordable housing—on the increase.
To date, much of the research on right to buy has asked questions about the role former right-to-buy properties might play in the wider housing market. Such resales are considered in detail in our new report. It has often been suggested that right-to-buy properties, when sold again on the private market, could help first-time buyers on to the property ladder; that is certainly true in some areas. Right-to-buy properties can be affordable and can help to widen choice at the lower end of the housing market, but in areas where the housing market is experiencing pressure, even former right-to-buy properties can be out of reach for some.
The finding that the ability of social landlords to meet housing need is affected by right-to-buy sales is not new but self-evident. That is why we acted in 2001 to curb overly generous discounts. The report identifies those areas that have seen the highest right-to-buy sales and that experience pressure on affordable housing and vice versa. The interplay between those factors is explored. One of the key arguments aired in the debate on the right to buy focuses on the replacement of stock sold. Commentators will be interested in the report's analysis, which underlines that one-for-one replacement of stock is not required. In recent years, we have supported significant new-build programmes for affordable housing in Scotland, and our investment is delivering new homes for rent and for low-cost home ownership where they are needed most. However, need varies so much throughout Scotland that local areas must assess carefully any response by way of new-build affordable housing.
Overall, the report presents a detailed picture of significant local variations in need and availability. Different areas have historically seen different levels of sales, and the need for affordable housing varies from one part of the country to the next. Therefore, it is really only at the level of the local community that the full effects of the right to buy can be considered with any real clarity.
As well as capturing a great deal of existing data, the report draws on some new qualitative research. The report on that work is also being published today. Our new research, which considers the views and experiences of tenants and purchasers, finds that the right to buy has had positive effects on individuals and households and has given purchasers a greater sense of control over their housing choices. In some cases, there appears to have been a shift in culture from renting to owner-occupation, with some younger family members now considering that owner-occupation is a realistic option.
One limited change since the Housing (Scotland) Act 2001 is the application of the pressured area mechanism, which is unique to Scotland. Scottish ministers can designate pressured areas to enable local authorities to suspend the right to buy for certain tenancies for up to five years. The final chapter of the report considers the effectiveness of the mechanism's operation and examines the cumulative effect of the designations that have been granted across Scotland to date. With six local authorities already operating suspensions, it is clear that pressured area status is being seen as a useful tool. Pressured area designations can help local authorities to preserve stock where it is needed to meet demand from housing waiting lists as part of a wider strategic approach to new affordable housing provision.
However, at this point the report cannot tell us much about one important aspect. The report's statutory timetable is such that it is impossible to say how the changes to discounts that were introduced under the 2001 act will alter sales patterns. That is largely because tenants who have taken new tenancies in the social rented sector since September 2002 must serve a minimum five-year qualifying period before they have any entitlement to buy their home.
The report reveals that the tenants who are now in the social rented sector are less economically active than their predecessors 20 years ago. It is unclear whether the smaller discounts that are now on offer will enable them to purchase in our buoyant housing market. From September next year, we will be looking with interest to see how sales under the modernised arrangements compare with those under the traditional scheme. Only at that stage will we be able to establish whether the legislative changes have achieved the better balance that was sought.
Today, our policy is to aim for mixed-tenure communities. We recognise that building monotenure estates of social rented housing is not desirable for residents or communities in the long term, although that was not always the case. The right to buy has been instrumental in mixing tenure and in helping to forge stability in many communities, as families purchase homes for the first time. However, the report recognises that that has not necessarily been the case across the board, as the effects of the policy have varied depending on location.
I have touched briefly on some of the key findings, but there are many more in the body of the report, for example on the relationship between the right to buy and repairs, as well as the relationship with the private rented sector, and on further areas of interest such as the characteristics of today's social rented sector compared with those of other housing tenures.
The right to buy is judged controversial by some people, and it continues to provoke strong reactions. There is no doubt that it has been a major influence in shaping many communities and in helping to build communities with mixed tenure. The substantial changes that we made in 2001 were largely welcomed by those who engaged in the debate on the right to buy. Some people want us to go further, by either amending the policy again or removing it altogether. However, the evidence in the report does not support such a position.
The report tells us many things about the right to buy and about the social rented sector in general. It does not tell us that the policy that the Parliament put in place in 2001 is failing to meet its aims. Those aims are to meet tenants' aspirations to own their own homes and, as a consequence, to create diversity of tenure within communities. Nearly 500,000 households have been helped into home ownership by the right to buy. In the report, we recognise that the right to buy can affect the ability of social landlords to provide accommodation in areas of pressure, but that is not a new finding. Indeed, it was precisely the reason for the introduction of the pressured area mechanism in 2001, which operates over and above our rising investment in new affordable homes for rent and in low-cost home ownership where that is needed most.
I acknowledge that the debate on the merits of the policy will continue and that it is as yet too early to evaluate fully the effects of the changes that were made in 2001. We will watch with interest what happens from autumn next year, when most tenants under the modernised scheme will begin to be eligible to buy.
I urge members to spend time looking at the evidence in the report, which is detailed and demands close attention. Until now, such an objective overview of the evidence has been lacking. I hope that the report goes some way towards filling that gap and will lead to a more informed and more rational debate on the right to buy.
It is regrettable that the report was released to housing organisations but withheld from MSPs, despite a promise to members of the Communities Committee that we would get it at half past 11 today. It is quite unacceptable that such a detailed document was not made available to members until it appeared at the back of the chamber when the minister first stood up to make his statement.
The report is not a comprehensive examination of the effect of the right to buy, despite the minister's claims. The report says that people who have bought through the right to buy view the policy positively. However, no one asked the people who have lost out through a lack of choice of housing type or who are now waiting longer to be housed whether they view the policy favourably. When will the minister take their views and needs into account, or do they not matter?
The minister claims that many younger people consider that owner occupation is a realistic option for them. Will he not acknowledge the truth, which everybody in the chamber and outside it knows, which is that many of them are buying because they have no choice and because they cannot get a house for rent? They are buying at prices that are more than they can afford, and mortgage arrears are increasing.
Quickly, please.
Just this week, it was revealed that homelessness due to repossession is at an all-time high.
Nearly 500,000 houses have been sold under the right-to-buy policy, which means that the number of homes that are available has been reduced, yet this Labour-Liberal Democrat coalition—
Do you have another question?
I am coming to it. Three thousand four hundred—
Please ask your question.
In 2004, the Executive built only 3,483 socially rented houses, which is less than were built by the Tories in 1995. Will the minister tell us what increase in money for housing he has made a bid for in the next spending review?
I have already expressed regret about what happened today. I intended to do what I said I would do in my letter to the Communities Committee, but it was against the procedures of the Parliament, as Tricia Marwick knows. In that sense, I was in error to assume that the document could be released at 11.30.
Tricia Marwick's main point was that we have not taken into account the views of those who need affordable rented accommodation. Ms Marwick has had the report for an hour or so, so she will know that by far the biggest chapter in it is about the effect of the right to buy on the availability of affordable accommodation. People will read that chapter with perhaps the most interest and attention because it contains detailed evidence that has not been available before. She might want to look in particular at the table on page 33, because it gets the issue into proportion. The number of extra houses that would have become available for rent is quite small. If we compare that with the number of houses that are being built now through our massively expanding affordable housing programme, it pales into insignificance. Over and above that, of course, Tricia Marwick is forgetting the pressured area mechanism. We recognise that, in certain situations, it is desirable to suspend the right to buy if there is a big gap between the number of lets becoming available and the number of people on the waiting list.
I believe that we have got the balance right, and that the Scottish National Party is turning its back on the thousands of people who have fulfilled their aspirations by buying their own home. Tricia Marwick is not examining the evidence in detail and is turning her back on aspiring home owners.
I thank the minister for providing me with a belated copy of this thorough report. I am pleased to see that it shows that a majority of tenants or former tenants view the right-to-buy policy positively, regardless of whether they have taken advantage of it. I am also pleased that the findings demonstrate clearly that a flagship Conservative policy has done more to transfer a greater amount of wealth from the state to the people than anything that this Executive has proposed in the past seven years has done. Accordingly, will the minister guarantee that if he is minded to change the policy in future—a move that we would oppose—existing tenants will retain their current rights?
There are no proposals in the report to change the policy. As I said in my statement, the report is a review not of the right-to-buy policy but of the evidence of the effect of the policy. In so far as it comes to a conclusion, it bears out the decisions that the Parliament made on the policies that Wendy Alexander and Jackie Baillie set out in 2001. Of course, we acknowledge the number of people who went into home ownership under the Conservative policy but, in 2001, the Parliament thought that the policy needed to be rebalanced so that there were lesser discounts and provision was made for the pressured area status of certain parts of the country. I think that we got the balance right in 2001. There is no intention to change that balance as a result of this report.
Is the minister in a position to say whether any implications for the 2012 homelessness target arise from the report, or is it too early to say? Also, will he confirm that pressured area status can apply to a housing type? Is the pressured area mechanism sophisticated enough to deal with an acute shortage of a certain type of property in an area—say, four-bedroom houses—but a surplus of other types of housing?
On the second point, that is not part of the pressured area mechanism. Detailed analysis is done of the housing situation in a particular locality. That locality can be quite a small area, which is why I said earlier that the relevant decisions have to be made at the community level.
On Mr Robson's first point, of course we will examine the evidence in the report in the context of our general work on the 2012 target. There are many parts to homelessness policy, but central to it is ensuring that there is an adequate supply of affordable housing. That is why work to increase the number of affordable homes that are built is at the heart of our housing policy. The number will increase next year to 8,000, which is the highest figure for many years. Ensuring that we build enough new, affordable homes is at the heart of our policy, and it is in the light of the overall policy that people should consider the effect of the right to buy, which, as I said in my answer to Tricia Marwick's question, is modest in comparison with the massive housebuilding programme that we have at present.
I, too, thank the minister for the advance copy of his statement and the report, even if it annoys one or two of his own back benchers.
I hear what the minister says about the lack of an intention to reform the right to buy as a result of the report, but I ask him about the longer term. He paints a picture of detailed, significant local variations in need and availability. Pressured area status might be a useful tool, as the minister says, but it is the only tool in the box. Can the minister tell us that, at least in the medium term, his mind is open to the case for more fundamental reform?
As I have indicated, we do not think that the evidence in the report points in that direction, but obviously the debate will continue and people will make their suggestions and contributions. Perhaps someone will make contrary suggestions today, although we have not heard many detailed proposals so far.
We believe that we struck the right balance with the provisions that are enshrined in the 2001 act. The pressured area mechanism is the best way to deal with shortages in particular parts of the country, but it exists over and above our fundamental policy of ensuring that enough new affordable homes are built in the right places. That is at the heart of our housing policy.
I welcome the minister's statement, but does he agree that the phrase "right to buy" is a misnomer? It is not a right but a right-wing tool of housing policy that was introduced by the Tories to sell off a collectively owned asset to private individuals. With that in mind, will the Scottish Executive make a commitment at least to consider a long-term, wider-ranging review and reform? As the minister said in his statement, there is still further information to be considered.
I certainly do not accept that the right to buy is a right-wing tool. I would not allow the parties of the right to claim the territory of aspiration, which is right at the heart of what the Labour Party believes in—if I can speak for the Labour Party rather than the Executive for a moment, although I am sure that the Executive shares that view. Aspiration and compassion, together, are absolutely central to what we are all about. Aspiration for those who want to own their own home is enshrined in our housing policy, but so is compassion, and we have the most progressive homelessness policy in Europe. I do not think that they are in any way contradictory.
I am reassured by the minister's comment that the debate will continue following the report and his statement, but the recent homelessness figures show that homelessness has gone up rather than down and is increasing in the categories of single men, pregnant women and lone parents. The Executive will not meet the 2012 homelessness target unless it fundamentally changes the right to buy. It is interesting that the report does not—
Will you come to a question, please?
The report does not mention the burgeoning number of homeless people on the waiting list. They are the people who are really affected. Will the minister consider abolishing the right to buy?
In fact, this week's homelessness figures show that the number of people who have been assessed as homeless is more or less the same as before. Of course, the numbers have gone up in the past few years because we have given homeless people new rights, but the figures that were produced this week show that action to prevent homelessness is successful in two thirds of cases; that more households have been rehoused than ever before; that rehousing in permanent accommodation is increasing, which is obviously central to our homelessness policy; and that fewer pregnant women and families with children are being temporarily accommodated in bed-and-breakfast or hostel accommodation.
There is still a long way to go on homelessness policy, but there are many signs of progress in this week's figures.
I refer the minister to the section of the report on right-to-buy resales in rural areas. It seems to indicate that not very much research has been done, but the minister must be aware of concerns that houses are being sold on to the second-home market. What research has been done or is being done in that area? What steps, if any, can be taken to redress the balance?
I cannot give an exhaustive account of the research that has been done, but Communities Scotland published some a few months ago.
Maureen Macmillan is right to fasten on to that particular aspect of the report. In general, much of the information about rural areas is comparable with the information about urban areas, but there seems to be a significant difference in respect of resales. I can write to the member with a more exhaustive list of the research that has been done, but I know that Communities Scotland did publish some recently on the subject.
First, is the minister surprised, as I am, that paragraph 4.4 of the report shows that Scottish Borders has a surplus of affordable housing, although that is not what my in-tray tells me? Could that figure be distorted by the fact that we had a wholesale stock transfer?
Secondly, when the minister says "affordable housing", does he mean affordable rented housing or affordable housing to buy, or both? Thirdly, has he asked those who are on the extensive waiting lists what they think of the right to buy? Fourthly, does he agree with the statement in paragraph 4.9.3 of the report that
"No new dwellings were completed by local authorities in 2004 or 2005"?
Make your answers brief, minister, if possible.
On the member's final point, a rising number of new affordable homes are being built every year. Of course the majority of them are being built by housing associations, but tenants are very happy to be moving into housing associations; it does not matter to them whether their home is a housing association property or a council house. However, some councils, such as Midlothian Council, are looking to build their own houses in the near future.
That takes me back to Christine Grahame's second point. The majority of our investment is in affordable rented housing, but the homestake shared equity scheme has already been a massive success. The three-year targets were met in about six months. There is great demand for the scheme, which is meeting a great deal of the housing need. If people were not able to access it, they would be on waiting lists for social rented accommodation.
What about the point about no new dwellings?
No, that is enough.
I noted with interest the minister's comments on pressured area designation. Is he aware that several local authorities have suggested that obtaining such a desigation can be cumbersome and overly bureaucratic? Does the report highlight any possible changes that could be introduced to make the process easier for local authorities?
I agree with the minister that it is too early to assess the full impact of the modernised right to buy that came about as a result of the amendments to the Housing (Scotland) Act 2001 that I lodged. What will the Scottish Executive do to monitor the impact of the modernised right to buy when it is introduced next year?
We will certainly be following that very closely indeed. Certain projections have been made and the report discusses different scenarios, but nobody can know for certain what the effect will be. We might surmise that a lower number of people will exercise their right to buy, but we cannot be sure. We will certainly consider the evidence very carefully indeed.
We will also examine pressured area designations to see if there is too much bureaucracy. I think that there were some difficulties with the first pressured area, but six designations are now in place and the whole process is flowing far more smoothly. It is right that there should be a thorough and comprehensive process. I notice that some people—not Karen Whitefield, of course—want to get rid of the process and just let local authorities do what they like. However, that would result in postcode variations and we must have some national criteria for designating pressured areas. Again, it is a matter of getting the balance right, but if any excess bureaucracy can be eliminated, it will be.
Does the minister agree that although debate is always valuable, this excellent report highlights the overall success of the principle of the right to buy, the fact that perhaps with some increase in the extent of new build, existing policies are genuinely working, and the fact that there is no need to disturb the existing arrangements for the foreseeable future?
That is certainly the view that I have outlined in my statement today. To repeat, we believe that the 2001 act struck the correct balance. We acknowledge what the Conservatives did in starting the policy, but the balance had to be adjusted in the way that it was under the 2001 act. We need the safety valve of the pressured area mechanism plus significant levels of new build to strike the right balance if we are to deliver both for those who need social rented accommodation and for those who aspire to own their own home.
I thank the minister for the report. As he rightly recalls, our objectives in the 2001 act were to remove the unfairness of two-tier tenancies, which were a legacy left by the Conservatives; to deal with the unfair levels of discounts—the bribe rather than reward—for long-standing tenancy; and to introduce a pressured area mechanism for areas in which there were particular pressures.
Can we have a question, Ms Alexander?
The Parliament took that step without the evidence. We now have the evidence that suggests that we have introduced a rather sophisticated solution that appears to be vindicated by the data.
Ms Alexander, do you have a question?
Will the minister comment on the fact that the challenge going forward is to deal with perhaps as much the areas of net surplus as those of net need in our continuing efforts to rebuild communities in Scotland?
I certainly agree with all Wendy Alexander's comments and, since she has asked a question, I repeat the tribute that I paid to her for all the work that she did on the issue.
On Wendy Alexander's specific question, she is right that the differences between housing issues in areas of net surplus and areas of net need are a key issue. In headline terms, the issue in areas of net surplus is perhaps more to do with regeneration. Community ownership can be particularly appropriate in those areas where a great deal of money is required for investment. Obviously, the area that Wendy Alexander represents is coming very much into the frame, given Renfrewshire's ballot on community ownership this week. The needs in areas that require regeneration will be different from those in areas that require new supply. We need to strike a balance between those two needs in our housing policy.
Does the minister accept that it is misleading for him to talk about a massive expansion in the building of social housing in the past three years, given that less social housing was built in 2004-05 than in 2000-01? Does he further accept that it is unacceptable and unsustainable that, since the Parliament was formed, 3.3 social housing units have been sold for every new social housing unit that has been built? Is that not the reason why levels of homelessness are not staying the same but increasing and why local authority and housing association waiting lists are rising? Does he accept that it is time for a radical response to the housing shortage, especially for young families? Instead of a right to buy—
Mr Sheridan, I think that we have got the message now.
Is it not time for a right to rent discount to keep people in the social rented sector?
Tommy Sheridan understates the figure for 2004-05. Next year, we will build 2,500 more affordable houses per year than in 2004-05. Therefore, we are very much expanding new affordable housing in Scotland.
However, the fundamental fallacy is the ratio that Tommy Sheridan quotes about the number of new houses built compared with the number of houses sold. I refer him to the table on page 33 of the evidence document that we published today, which lists figures that are central to the whole debate. The significant issue is not the number of houses sold under the right to buy but how many of those would have come up for let in a given year. That story is told in table 4.4 on page 33.
For example, although East Lothian has had significant problems with a lack of new affordable housing, the number of lost lets as a result of the right to buy has been only seven a year. The number of new houses built in the area each year was far greater. In Edinburgh, the number of lets lost through the right to buy has been 42 a year—by the way, that represents the upper limit because, for various reasons, we made that figure as high as possible—whereas this year 596 new affordable homes are being built in Edinburgh. We must keep the lets lost because of the right to buy in proportion. They are not the fundamental problem, although we will deal with them if the area is under pressure. The real issue is building new homes and, notwithstanding what Tommy Sheridan said, that is exactly what we are doing.
I express my regrets to the four members whom I cannot call, but we have overrun the time allocated for this item of business.
On a point of order, Presiding Officer. I have sat through the previous 32 minutes. Some members asked questions that lasted for two and a half minutes. I just wanted to get on my feet and say that the right to buy is a good concept but—
You are not entitled to say that, Mr Swinburne. That is not a point of order.
I note your concern at the length of some of the questions. The member who was due to be called next was Cathie Craigie. I particularly apologise to her, but we know why that last question was squeezed out.
I encourage members, particularly those who ask long serial questions, to think in future about the rights of other members. We give a degree of latitude to the lead questioners from the main political parties, but members who follow on further down the line should not think that they are entitled to ask four questions, nor should they think that they are entitled to build up through five or six lengthy sentences the basis for a question that they could ask as a free-standing question.