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5. THE IMPACT OF THE RIGHT TO BUY ON NEIGHBOURHOODS AND DISREPAIR

5.1 Introduction

5.1.1 One of the important areas of debate over the impact of Right to Buy concerns its potential impact on the state of disrepair of the stock. Some would argue that ownership brings with it a much greater incentive to maintain and improve a property. On the other hand, it could also be the case that transferral of ownership to tenants through Right to Buy could have a negative effect on housing quality, particularly in multiple occupancy buildings. It could be the case that owner-occupiers, at the point of purchase, have not anticipated the lifetime costs of maintaining their property, particularly in the case of flats, which include communal components of the buildings. As a result, Right to Buy purchasers might be unable to meet their share of costs. This chapter considers the extent to which available evidence supports or refutes these viewpoints.

5.2 Analysis from the Scottish House Condition Survey

5.2.1 Analysis from the 2002 SHCS, shown in Figure 5.1, reveals that 'urgent disrepair' is equally likely to exist in dwellings owned by non-Right to Buy owners, ³⁴ Right to Buy owners and housing associations/local authorities. 'Any disrepair', however, is slightly less likely to be observed in dwellings owned by non-Right to Buy owners than it is in Right to Buy-owned properties, although local authority/housing association dwellings have a slightly higher rate of disrepair than those purchased under Right to Buy.

Figure 5.1: Percentage of dwellings with disrepair by tenure

Source: 2002 SHCS

5.2.2 While data on stock condition is ambiguous, the evidence on whether Right to Buy households have conducted improvement work on their property is more clear. Table 5.1 summarises some of the results from the 2002 SHCS.

Table 5.1: Percentage of households which had work carried out in last five years by tenure

Source: 2002 SHCS

5.2.3 The results show that all owners were more likely to have carried out work than social landlords, and that there were no great variations in the improvements made by non-Right to Buy owners and Right to Buy owners. Over the five-year period, Right to Buy owners were more likely to have carried out general building work, and to have replaced windows and doors, than non-Right to Buy owners.

5.2.4 It is difficult to determine the particular reasons why rates of work across tenure are different. The data does, however, seem to support the suggestion that private owners are more likely than local authorities or housing associations to undertake work to maintain their property.

5.2.5 Common repairs and maintenance are often identified as particular issues for former Right to Buy properties, particularly for blocks of flats containing a mixture of tenures. Little attention was paid to this issue in the early years of Right to Buy and this coincided with little investment in social rented housing stock but dealing with common repairs to property shared between owner-occupiers and local authorities often raises complex legal and financial issues. Conditions set out in title deeds can spell out how the local authority and owner-occupier should deal with the repair and maintenance of common parts, but an initial lack of clarity has led to deeds specifying different requirements in different areas and sometimes varying within areas depending on the solicitor involved in the sale. Glasgow City Council avoided this problem by drawing up standard deeds of condition before any homes had been sold. The standard deed requires that if one property in a block is owned by the council, all other owners are obliged to use the council's factoring service (Jones & Murie, 1999).

5.2.6 Research by Leather & Anderson (1999) found little consistent practice amongst local authorities and other landlords in relation to the repair of common elements of buildings and maintenance of common areas. In many cases authorities appeared to have taken few positive steps to secure future repair and maintenance in Right to Buy properties, and particularly to have made little or no provision to compel owners to participate in common repairs and maintenance. Where arrangements had been made their effectiveness and the extent to which they had been enforced varied. Factoring arrangements funded through service charges were used by a few authorities but not the majority. Landlords were even less likely to have established a framework of clear legal obligations in relation to larger scale repair work and property improvements.

5.2.7 Earlier research with local authorities, carried out for the Scottish Consumer Council, also identified difficulties with common repairs (Russell & Welsh, 1998). Local authorities raised the issue that tenants often bought their house because of a difficult relationship with the council, only to find that relationship had to be maintained, which could create bad feeling. The research found mixed practice amongst local authorities in respect of the amount of information supplied to tenants concerning their common repair responsibilities, with many respondents indicating that the only information provided was in the title deeds. All responding councils except one said that they consulted individual owners about larger common repairs, and most indicated that they would consult in all instances. The most common causes for complaint about common repairs related to the need for repairs, and the quality and cost of the work. Councils were asked how many owners refused to pay their share of common repairs. Of those councils that could answer, refusals ranged from none to 75%.

5.2.8 Research by Scott et al. (2001) found that social landlords also considered the relationship with owners to be problematic. Inappropriate and widely varying deeds of conditions were considered to make dealing with repairs, maintenance and improvement very difficult. Obtaining agreement from owners to fund their share of the repairs and improvements was often difficult, as some were unable, and others unwilling to pay. Scott et al. also found that the new owners of resold Right to Buy properties were often unaware of the burdens, common obligations and costs for which they were liable.

5.2.9 Owners have tended to make a number of criticisms about the approaches taken by landlords to common repairs and in some cases in their role as factors. Scott et al. found that criticisms of landlords included inadequate information at the point of house purchase, which left owners unaware of their new responsibilities, failure to inform and consult with owners about costs, repairs and proposed maintenance, and ignoring requests for communal repairs to be carried out. Owners were unclear about the different powers and roles of factor landlords in relation to maintenance and improvements and found landlords' behaviour confusing and contradictory. Despite their bad experiences of factoring, however, the owners considered the principle of co-ordinated management of property to be reasonable. The Housing (Scotland) Act 2001 introduced the requirement for potential Right to Buy purchasers to be informed about common repairs obligations prior to sale, in order that potential buyers would be aware of their future responsibilities.

5.3 Right to Buy and refurbishment of the social rented stock

5.3.1 One of the main drivers towards improving the condition of existing social rented stock is the Scottish Housing Quality Standard ( SHQS), ³⁵ which social landlords must meet by 2015. In some parts of Scotland, social rented and former Right to Buy properties frequently share communal features, such as roofs and cladding, as well as common areas. The ability and willingness of former Right to Buy owners to contribute to the funding of major improvement works can therefore have a direct impact on the condition of existing social rented stock and on the physical regeneration of communities. If Right to Buy owner-occupiers do not contribute towards costs for common repairs projects, social landlords may be at risk of not meeting the SHQS.

5.3.2 In Glasgow, for example, former local authority housing stock is now owned by Glasgow Housing Association ( GHA), following stock transfer in 2003 from Glasgow City Council. GHA Management Ltd factors almost 26,000 flatted, owner-occupied houses. ³⁶ Nearly 20,000 ³⁷ of these properties share common elements with GHA properties. In this case specific public funding has been allocated for local authority improvement and repair grants to assist owner-occupiers with the costs involved.

5.3.3 The Housing (Scotland) Act 2006 includes provisions intended to ensure that tenants who wish to exercise the Right to Buy are better informed about the potential costs of ownership, including those associated with major refurbishment programmes. Section 113 of the 2006 Act inserts a new section 63A into the Housing (Scotland) Act 1987 which empowers Ministers to prescribe in regulations the information to be provided. The intention is that this will include information on house condition derived from the valuation inspection which establishes the sale price, information from the landlord about the costs of forward programmes of work, and information on the likely lifespan and replacement costs of elements of the property. The 2006 Act will also provide local authorities with more flexibility in the forms of assistance - advice, practical assistance, loans or grants - which can be provided to owner-occupiers.

5.4 Attitudes towards repairs

5.4.1 Research with tenants and Right to Buy buyers found evidence of different attitudes to repairs (Holt Brook et al, 2006). Responsibility for repairs and improvements was an important factor in influencing some respondents' decisions about whether to buy. For some, becoming responsible for repairs and improvements was a positive factor which encouraged them to buy their property. These respondents considered this responsibility to be an advantage of ownership, allowing them to decide what repairs were done and to ensure that they were done promptly and to a standard they considered acceptable. For others becoming responsible for repairs was a disadvantage, and was often linked to a general lack of confidence in home buying and to a lack of family history of home ownership. These respondents often had little idea of what the cost of repairs might be and were concerned that the costs might be unmanageable.

5.4.2 Owners who had purchased through Right to Buy generally appeared to be aware of the additional costs of repairs and maintenance, including repairs to common areas. These costs were generally not considered to be problematic and a few respondents had already paid for common repairs. These were generally organised by the council. It is not clear, however, to what extent these had involved large-scale maintenance and/or improvement. Some concern was identified about the repair and maintenance of common areas, as repairs were no longer organised by the council and owners were unwilling to finance them.

5.5 Impact of the Right to Buy on neighbourhoods

5.5.1 The impact of Right to Buy is felt keenly at a neighbourhood level. The pattern of sales and resales and the quantity of remaining social rented stock at a local level account for the extent to which neighbourhoods, rather than the stock as a whole, is subject to residualisation. This section considers issues relating to mixed communities, variations in Right to Buy sales at neighbourhood levels and what the trends in social housing and resales, discussed previously, mean for neighbourhoods.

5.5.2 The Right to Buy can produce mixed communities in areas where sales take place. It has been suggested that mixed communities can improve the well-being and circumstances of their residents by deconcentrating poverty, improving services, widening access to employment, reducing crime and anti-social behaviour and improving the area's reputation. Tenure is often used as a proxy by researchers for other social characteristics in relation to mixed communities. In creating tenure diversity the aim may be to create mixed income communities, or to create communities with other mixes of social characteristics, such as employment status, household type, age or ethnicity.

5.5.3 Without the option of buying in their existing neighbourhood, households with a degree of mobility and the ability to purchase a property on the open market may move elsewhere, leaving areas of mono-tenure. Mixed tenure can also support extended family networks, allowing families which may have combined or split up to stay within the same area and enabling different generations to live nearby and provide support to one another (Allen et al., 2005).

5.5.4 Work by the Joseph Rowntree Foundation ( JRF) (Bailey et al., 2006) explores different ways in which mixed tenure and mixed income communities can be achieved. The research puts forward three descriptions of mixed tenure:

• Integrated - tenures are mixed within the same street
• Segmented - different tenures are in distinct blocks or buildings
• Segregated - larger concentrations of tenures are found

Right to Buy is exercised according to the will of tenants. Evidence in previous chapters has demonstrated that Right to Buy sales occur in greatest concentrations in the most popular neighbourhoods, and so high numbers of sales might be expected to occur in a fashion similar to JRF's 'segmented' or 'segregated' method in very popular locations.

5.5.5 It is more likely that Right to Buy sales will take place individually across neighbourhoods. In principle, this is similar to the 'integrated' category, which JRF and others have also referred to as 'pepper-potting'. Whilst communities being newly built would expect to contain a balanced mix of tenure, the Right to Buy mixes tenures in a more random manner. The Right to Buy is a rather blunt tool for mixing communities in this respect. 'Pepper-potting' can be difficult in new developments, however, because of the higher design and space standards generally found in social housing than in private housing and a review of research which analysed mixed communities for the Housing Corporation and JRF suggests that the pepper-potting of tenure enabled by processes triggered by individual residents, such as Right to Buy, generally works well (Tunstall & Fenton, 2006). It is also worth bearing in mind that it is not possible to control the movement of former Right to Buy properties into the private rented sector, and that - without applying rights of pre-emption or housing burdens - this is true for all developments, whether old or new.

5.5.6 One of the suggested benefits of mixed communities is social contact between renters and owners. In particular it is suggested that such contact can increase social capital and improve the employment prospects of economically inactive residents through access to informal networks and working owner-occupiers acting as role-models. The evidence for this theory is in fact very weak, with most research suggesting that interactions between residents from different tenures is limited (Holmes, 2006). In neighbourhoods where home ownership has been realised through Right to Buy and the differences in socio-economic characteristics between tenures are less pronounced, however, interaction increases substantially (Beekman et al. 2001).

5.5.7 Some of the research on mixed communities had identified that tenure mix cannot guarantee particular types of mix in the longer term. Holmes (2006) notes that in some areas there was evidence of concerns prompted by the growth of private renting. This ongoing tenure change makes it difficult to manage or control the profile of areas in the long term. This issue has been identified as one of concern in relation to Right to Buy as properties may become privately rented for a variety of reasons and this may lead to subsequent management problems.

5.5.8 JRF stresses the importance of ensuring that social rented and private housing within a mixed tenure community are indistinguishable, to prevent stigmatisation of social tenants as far as possible. This is an aspiration for new communities, where it is important that differences in tenure are not made obvious by the size and design of new homes. Research by Beekman et al. (2001) found that residents in a case study area where mixed tenure had been achieved through Right to Buy had more difficulty in distinguishing the tenure of their neighbours than residents in other case study areas.

5.5.9 As has been discussed, there is evidence that social housing as a whole has become increasingly residualised, but where social housing is concentrated in particular areas this can have an effect at the neighbourhood level. Around 3% of households (66,000) in Scotland live in areas categorised as comprising exclusively social rented tenures. Glasgow City has approximately 60% of these - over 40,000 households in the city are in these highly concentrated areas of social rent, accounting for 15% of all households in Glasgow (Figure 5.3).

Figure 5.3: Number and percentage of households in datazones categorised as exclusively social rented

5.5.10 It has been argued that the Right to Buy encourages more affluent tenants to remain in neighbourhoods rather than leave to become owner-occupiers elsewhere and that this has helped to create more stable mixed income communities. Conversely, where Right to Buy sales have been low, it has been argued that the impact of Right to Buy has created neighbourhoods of residualised social housing with high levels of turnover and socio-economic problems. The evidence broadly suggests that the impact of Right to Buy on individual neighbourhoods is linked to issues of stability and demand that existed prior to Right to Buy, with Right to Buy reinforcing existing neighbourhood trends. Initially stable, high-demand neighbourhoods have seen high levels of Right to Buy sales. Low demand areas on the other hand have seen reduced levels of sales.

5.5.11 Work by Jones & Murie (1999) highlighted the impact of the Right to Buy on stability of neighbourhoods, looking at both Glasgow and Birmingham. In Glasgow they compared the turnover of properties sold under Right to Buy and the rates of turnover in the market with data from the City Council related to turnover in local authority stock. They found that the turnover associated with resales was generally lower than the turnover of lettings and that areas where Right to Buy sales, and consequently resales, were low tended to have higher relet rates. They concluded that neither the Glasgow nor Birmingham data provided simple conclusions to questions about the relationship between sales and stability on estates. The data did show that turnover was lower on estates with higher sales, but did not show that high sales led to low turnover. Jones & Murie suggested that the estates with high levels of sales were likely to be the more stable estates with lower levels of turnover prior to the Right to Buy. They argued that both council estates with higher levels of home ownership and those with lower levels of home ownership are likely to be characterised by higher turnover in the future than previously. In areas with lower levels of sales, it appears that due to wider social, economic and aspirational changes, new tenants are less likely to stay in areas for as long as they did previously, hence higher turnover is likely to be a feature of these areas. In areas with higher levels of sales, the short-term impact may be slight as the original buyers did not have plans to sell, but in the longer term those properties will be sold and the market role of the properties appears more likely to be one with higher turnover.

5.5.12 Research by Holt Brook et al. (2006) indicated that tenants and Right to Buy buyers perceived a mixed impact on neighbourhoods. The most common view was that owners generally took greater care of their properties than tenants and in so doing encouraged other residents to take more pride in their homes too. It was suggested that this increased pride in the home prompted purchasers to be better neighbours and take more interest in the neighbourhood, although a contrary view suggested that some purchasers became more selfish and less concerned about the neighbourhood. There was a sense that where significant numbers of homes had been purchased the reputation of the neighbourhood in the eyes of the wider community was enhanced. Some respondents, however, particularly tenants, focused on the negative impact of the Right to Buy in terms of reduced access for tenants to what were seen as 'good' or 'stable' neighbourhoods. There was also a view that as 'good' neighbourhoods became increasingly inaccessible, the poorer or less desirable housing in other areas was being abandoned by tenants, particularly families, and to an extent by councils who were considered to be slower in carrying out repairs or taking action to enforce social order than before.

5.5.13 Research among local authorities and RSLs also found mixed views on the impact of Right to Buy on neighbourhoods (Newhaven, 2005). Almost all respondents pointed to the concentration of Right to Buy sales in the more sought-after properties and neighbourhoods, including rural areas, although a couple of respondents intimated that Right to Buy was only one of a number of factors that had led to a shortage of social rented housing. A few local authorities and RSLs emphasised that Right to Buy had had the positive effect of breaking up monolithic social rented estates and allowing mixed tenure to develop. By contrast, a small number emphasised that because Right to Buy sales were concentrated in the more popular housing estates, Right to Buy had increased the spatial concentration of households in multiple deprivation and reduced social cohesion. Two respondents indicated that they considered the local impact of Right to Buy had largely depended on the characteristics of the local estates and neighbourhoods at the time when Right to Buy was introduced. Popular estates experienced high levels of sale and retained high waiting lists, and unpopular estates experienced low levels of sales and falling demand for social renting.

5.5.14 As Jones & Murie (1999) suggest, levels of stability may change somewhat as resales increase and data about resale purchasers suggests that resales are bringing about demographic change in neighbourhoods. Neighbourhoods with low levels of sales appear to be experiencing increased instability, with low demand and high turnover of lettings, but this may reflect initial levels of instability rather than simply the impact of Right to Buy.

Neighbourhoods and disrepair - summary of key findings

• General lack of confidence in home-buying and ownership was important in tenants choosing not to exercise the Right to Buy. Tenants who had chosen not to buy often had little knowledge of the repairs costs which buyers would incur.
• The argument that Right to Buy purchasers do not undertake repairs at the same rate as other owner-occupiers is unfounded. However, it has been necessary to allocate public funding to assist Right to Buy owner-occupiers with the costs of contributing to major improvement works. Under the Housing (Scotland) Act 2006, prospective Right to Buy purchasers will be provided with better information about the type and cost of potential future work.
• Increased levels of owner-occupation through Right to Buy sales and resales have had positive effects at the neighbourhood level, creating more stable, mixed tenure communities, which are perceived as good places to live.
• Less popular areas, which experience lower sales rates, can appear more unstable as a result of higher Right to Buy sales elsewhere, but this may be because the areas have historically been perceived as less desirable places to live.

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