I woke this morning to Good Morning Scotland extolling the virtues of East Lothian Council and its house buy-back programme. My colleague Cllr. Stuart Currie was on being interviewed on why this was a good idea and was backed up by the housing minister, Keith Brown MSP and several spokespeople for the housing market. For those of you who may wonder who it’s a good deal to spend public money in some cases buying back houses, sold to their original tenants for rather less, allow me to fill in the background detail.
Like other councils, East Lothian started off around 1980 with an appreciable stock of public housing. The Tenants’ Rights, Etc. (Scotland) Act 1980 introduced the Right to Buy to tenants of local authorities with the following conditions:
- 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.
This scheme worked so well that 25 years on ELC stock had dropped from 20,000 to under 8,000 and many had further changed hands on the normal housing market. Unlike some areas where the stock was poor, ELC maintained its housing to a high standard. This, combined with many improvements made by new house owners meant that the stigma of public housing that grew elsewhere didn’t really happen in East Lothian where the distinction between public and private housing has blurred.
For reasons best known to themselves, the previous Labour administration felt they should not build more houses in case they were sold off but also eschewed a range of Housing Associations (who were supposed to take up the slack) to focus on the Homes for Life Partnership in Haddington that was effectively under direct control.
Unfortunately, instead of delivering the 500 houses in three years as promised in 2002, HfLP failed to even deliver 300 houses in five years. Because EL tenants move seldom and those with a house knew what a deal they had, affordable housing to rent became like hen’s teeth and the local waiting list grew to over 4,000.
Meantime, under pressure from developers and Edinburgh city, successive local plans allowed a myriad of private housing developments, totalling over 5,000, to be built all across the county. Fewer than 5% of the total were affordable. This meant that the bulk of residents in those new houses were from outside the county. While we welcome all to discover the joys of living in East Lothian, this middle-to-upper range build skewed demographics in several towns, where a young generation was forced to live at home after leaving school and many local shop staff, artisans and hand/craft workers forced to live elsewhere.
But, since May 2007, despite a major economic downturn which has virtually frozen private house building (and a new 25% affordable requirement in East Lothian), ELC has succeeded in building over 400 affordable house with a similar number at various stages in the pipeline. It has a achieved this by having its new SNP-led Administration put this at the very top of its priorities for delivery to local residents. This has been made possible by pursuing a number of interlocking measures:
- Full use was made of discretionary borrowing powers available to councils. As ELC’s business plan for housing ensures that rents for new houses covers the interest paid on the loan to build it, this has resulted in a self-sustaining “virtuous cycle” of building. These new houses are not subject to right-to-buy
- While happy to build council houses, ELC have been very flexible in their approaches, which have included purchasing homes from private developers, having private developers build to spec, enabling housing associations to build where they already held the land and working with the Scottish Government so that additional capital funds were made available from them.
- All houses built have been to specs superior to current private homes in that insulation standards were much higher, room dimensions more generous and a proportion of homes were purposely built to suit those with mobility or other difficulties. This has been confirmed by the delight of all new tenants.
- Allocation policy—including where the council puts tenants in housing associations homes—has been altered to preserve communities and avoid creating unnecessary social problems. Until 2010, in a well intentioned effort to support the most vulnerable, virtually all new homes went to such people. Since many people with social problems were bunched together, there was no natural support system. The change was to allocate most new homes as transfers to existing tenants in good standing. This pleased them and then an equivalent number of homes (but scattered through well established, functional communities) was where the vulnerable were housed.
- Care was taken to continue to invest in existing stock with an ambitious and ongoing programme of kitchen, bathroom, heating, fence and electrical upgrades that ensure that ELC stock remains among the best in the country. This has proved possible while still retaining 2nd-lowest rents in Scotland.