National Housing Trust scheme criticised for ‘reviving Right to Buy’

Homes delivered through the NHT initiative

The Scottish Government has been accused of “reviving the Right to Buy” policy after it was revealed that homes delivered through its National Housing Trust (NHT) scheme can be sold off and removed from public ownership.

Devised by the Scottish Futures Trust (SFT) to increase the number of affordable-rented homes across Scotland, the NHT initiative sees developers appointed to build a specified number of affordable homes on land they already own backed by Scottish Government loan guarantees.

But once built, the homes must be sold off within five to ten years of completion to pay back the government loans.

A total of 1,491 homes for mid-market rent have been delivered under the programme to date, with hundreds more in the pipeline.

However statistics obtained by investigative journalism platform The Ferret show the first 131 NHT financed homes have been sold off, all of them in the Aberdeen area.

“It’s extremely worrying that people who can’t afford to buy these houses will have their homes sold out from underneath them.”

The NHT website states that “a local partnership company made up of the developer, the participating local authority and the NHT, buys the homes and lets them to tenants at mid-market rates”.

And although the homes in question were bought out by Aberdeen City Council, putting the homes in public sector ownership, there are no such guarantees for other homes built under the programme as sitting tenants are given first option to purchase their home at the market rate.

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

Scottish Labour, meanwhile, have went further and compared the scheme to the abolished Right to Buy programme.

Labour housing spokesperson, Pauline McNeil MSP, said: “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.”

A development in Westercraigs saw the 1,000th home delivered via NHT

The Right to Buy scheme, which came to an end in Scotland in 2016, saw half a million Scots families purchase their council or housing association home at a discount.

But unlike this policy, 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.

A similar deal has also been agreed by Eildon Housing, which will see the social landlord acquire 41 homes in Galashiels and Innerleithen to ensure they remain available for affordable rent.

The Liberal Democrats said the market value element of NHT makes it unlikely that many current tenants in Scotland largest cities will have the means to be able to buy their own home when it is time for it to be sold.

Liberal Democrat housing spokesperson, Caron Lindsay, told The Ferret: “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”.

“NHT provided an economic stimulus for the house building industry that was struggling at the time.”

Graeme Brown, director of Shelter Scotland, said that 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 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 told The Ferret.

NHT funding helped deliver the Sandy Loan development in Broughty Ferry, Dundee

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.”

A Scottish Government spokesperson insisted that the NHT programme was good value for taxpayers.

They said: “The National Housing Trust 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.”

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