National Housing Trust

Scottish Government housing scheme criticised for ‘reviving right to buy’

The first homes built under the Scottish Government’s National Housing Trust programme have been sold off, prompting claims that the SNP have “revived the right-to-buy.”

Around 4.4 per cent of all affordable homes built by the Scottish Government since 2012 have been financed using a programme devised by the Scottish Futures Trust called the National Housing Trust (NHT).

1491 homes have been built for mid-market rent under the programme. Each NHT development is backed by Scottish Government loan guarantees worth more than £159m with hundreds more set to built.

The Ferret can reveal that to date 131 NHT homes have been sold-off, in Aberdeen and the Borders.

Scottish Labour have compared the scheme to the abolished “right-to-buy” programme, as National Housing Trust homes must be sold off within five to ten years of completion to pay back the government loans, with sitting tenants given first option to purchase their home at the market rate.

The Liberal Democrats have voiced concern and said that the programme will result in NHT tenants who cannot raise the money to buy, having their homes “sold out from underneath them.”

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Statistics obtained by The Ferret show the first National Housing Trust financed homes, built by the Stewart Milne Group, were sold off in Aberdeen.

Although these homes were bought out by a local Registered Social Landlord in this case, there are no such guarantees for other homes built under the programme.

Due to this uncertainty, Shelter Scotland has also criticised the National Housing Trust programme and said it was “not the answer to Scotland’s desperate shortage of permanent social housing.”

NHT homes, which are all offered for ‘mid-market’ rent as opposed to the more affordable ‘social rent’ rate, are not all managed by Registered Social Landlords, with tenants typically offered no more security of tenure than private sector tenants.

When it is time for the properties to be sold, tenants are given first refusal to buy their homes.

But unlike the right-to-buy council house sale programme that the SNP government scrapped, tenants of NHT homes must find the full market value at the time of the sale if they want to remain in their homes – or hope that as in Aberdeen, a registered social landlord can step in to buy the homes.

On learning of the first National Housing Trust sales, Labour Housing spokesperson Pauline McNeil accused the SNP of “reviving the right-to-buy.”

“SNP ministers made a huge deal about abolishing Right to Buy – and they got the support of the Scottish Labour party in the process, but these revelations make clear that affordable housing stock in Scotland isn’t necessarily affordable for renters and some of what’s there is set to be sold off,” she said.

‘Dysfunctional’ Help to Buy subsidy should be scrapped, say critics

New housing has been financed throughout Scotland using the National Housing Trust model, but nearly half of the properties built to date are concentrated in the capital.

Edinburgh’s latest housing strategy says that officials plan to build 1500 homes in the city using the National Housing Trust finance model.

The same plan also recognises that: “The average house price in Edinburgh is six times the average gross annual earnings, 42% higher than Scottish average; making Edinburgh the least affordable city in Scotland to buy a home.”

Critics say this makes it unlikely that many current tenants of National Housing Trust homes in the capital will have the means to be able to buy their own home when the developers decide it is time for it to be sold.

Liberal Democrat housing spokesperson Caron Lindsay said: “It’s extremely worrying that people who can’t afford to buy these houses will have their homes sold out from underneath them.”

She also called for the Scottish Government to set out “how to best support the thousands of people who will want to remain in their homes.”

Councillor Gavin Barrie, Housing and Economy Convener at the City of Edinburgh Council said the NHT programme was “successful in providing housing on development sites, which stalled during the recession,” and that the council did not intend to bring forward any new NHT developments beyond those currently under construction.

He also pledged to help tenants to decide on their “best option” by providing advice and information “if developers decide to sell the homes.”

Graeme Brown, Director of Shelter Scotland, said that the the NHT model is not exactly the same as the abandoned right-to-buy policy as this “saw half a million homes sold off at massive discounts making it impossible for councils to replace them.” But he said the NHT programme was still “not the answer to Scotland’s desperate shortage of permanent social housing.”

He also argued that the relatively insecure tenancies offered under the NHT should be the exception, and not the rule, when it comes to funding new affordable homes.

“We need a return to having social housing which provides secure homes at rents which are affordable,” Brown said.

In response, the Scottish Futures Trust (SFT) said that the homes built under the programme were all “additional” to those funded through other Scottish Government social housing programmes.

“The innovative National Housing Trust programme, which established the mid-market rent sector in Scotland, was designed for Scotland’s local authorities to use as part of a ‘toolbox’ to help increase the supply of homes at affordable rent,” the SFT spokesperson said.

He added: “It also provided an economic stimulus for the house building industry that was struggling at the time. SFT, working with Scottish Government and local authority stakeholders, devised a procurement strategy that was equally attractive to SMEs as to larger house builders.

“After the homes have been available for mid-market rent for at least five years, they may be sold either to the tenants occupying the homes at that time, to the relevant local authority (or its nominee), or on the open market. The homes must be offered for sale to the occupying tenants first, then to the relevant local authority (or its nominee).

“Only if neither indicates an intention to accept the offer to sell, will the homes be offered for sale on the open market.”

“So far, 131 NHT homes have been sold but all remain in the affordable sector.”

The Scottish Futures Trust has been criticised in recent months over the “secretive” finance schemes it has devised to raise capital funding for public sector projects. Audit Scotland is planning to investigate the Scottish Government body, amid claims that it may not deliver tax payers value for money.

Watchdogs should investigate secretive charity, says MSP

Last month The Ferret revealed that the SFT had set-up a charity – headed up almost entirely by people with links to the private finance industry – that had banked £2.5m entirely from tax-payer funded private finance investments.

Commenting on SFT generally, Pauline McNeill said: “Labour has raised concerns around the operations of the Scottish Futures Trust for some time now, and here is another reason why. We need a full review of the Scottish Futures Trust to get to the bottom of operations like this.”

But a Scottish Government spokesperson insisted that the NHT programme was good value for tax-payers.

They said: “The National Housing Trust (NHT) was the first guarantee-based scheme for housing in the UK.

“Launched to stimulate the economy during a difficult period and increase the number of high quality new homes with no subsidy, it has proved popular and represents good value to the public purse.

“Since right-to-buy was introduced in 1980, nearly half a million council and housing association homes were sold to their tenants.

“By taking the bold step to end it we have protected up to 15,500 social homes from sale, safeguarding this stock for future generations. That, along with our ambitious plans for housing, delivering 50,000 affordable homes, including 35,000 for social rent over the course of this parliament, will ensure we meet the housing needs of communities across Scotland.”

For the year ending March 31 2017, there were 137,100 on affordable housing waiting lists in Scotland, with some claiming that the true figure could be far higher.


This story was updated at 15.15 pm on day of publication to clarify the following points.

At publication we reported that all the homes sold were in Aberdeen. The Scottish Government subsequently provided an update to an earlier FOI request and confirmed that NHT homes have now been sold off in both the Aberdeen and Borders council areas of Scotland.

On publication the report also said that Aberdeen City Council had bought all the homes sold off in its area whereas the purchaser was another registered social landlord.

The original version of our report also said that NHT homes were mainly offered for mid-market rent. We’ve made a further amendment to make it clear that all homes in the scheme are mid-market rent.

We’ve also added a comment from the City of Edinburgh Council.

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