§ Mr. Ioan Evansasked the Secretary of State for the Environment whether he is yet able to make a further statement about action to safeguard the position of individuals who have entered into equity sharing arrangements which include an option to purchase the freehold reversion of their houses, and also on the topic of options in general for tenants to buy the houses in which they live.
§ Mr. ShoreOfficials of my Department have had constructive discussions with representatives of the local authority associations about equity sharing schemes which include options to purchase.
The Government wish to encourage viable equity sharing schemes but as stated in the Answer to my hon. Friends the Members for Houghton-le-Spring (Mr. Urwin) and for Warley, East (Mr. Faulds) on 25th May 1978, I have been advised that local authorities have no power to grant options to persons to buy council houses, whether or not the option is in the context of an equity sharing scheme. Local authorities have had opposite advice. The Government therefore propose to introduce legislation as soon as possible which would put beyond doubt the validity of existing equity sharing schemes that contain an option and enable such arrangements to be lawful for the future. In these circumstances, I intend to make any necessary determinations 470W to enable local authorities to receive subsidy in equity sharing schemes and to continue the payment of the subsidy in respect of schemes for which a determination has already been made.
I would also encourage authorities to pass resolutions declaring that their policy in respect of such schemes would be to sell freehold reversions on request on the appropriate terms.
I believe that the action proposed above will be of considerable assistance to authorities which have embarked or are thinking of doing so on such schemes and will give full confidence to individuals who have already entered into arrangements or propose to do so.
The proposed legislation would not seek to validate options to purchase council houses in general. While I am advised that the law as it stands does not give power to authorities to grant options, I have decided, in view of the different advice received by local authorities, and in order to put the issue beyond doubt, to amend the general consent to the sale and leasing of council houses contained in Circular 54/70 so as to specifically exclude any option for any person to purchase a council house other than an option which is granted in connection with equity sharing arrangements.