HC Deb 27 November 1979 vol 974 c611W
Mr. Joseph Dean

asked the Secretary of State for the Environment what effect the increase in minimum lending rate will have on local authority housing revenue accounts and council house rents in general.

Mr. Stanley

The effect of the increased minimum lending rate on the borrowing costs which individual local authorities incur in repaying outstanding housing debt will depend on the duration of the new minimum lending rate. In so far as any increases in borrowing costs fall on local housing authorities, it is for them to decide whether they should be met through rents and/or rates.

Mr. Joseph Dean

asked the Secretary of State for the Environment if, bearing in mind the new mortgage interest rates, he will list the mortgage repayments on the purchase of a post-war two-bedroom, three-bedroom and four-bedroom council house, at the discounts of 50 per cent., 40 per cent., 30 per cent. and 20 per cent. on current valuations.

Mr. Stanley

Information about the value of different sizes of council house is not available. Assuming the average sale price before discount of a council dwelling at £11,550 and a 100 per cent. 25 year mortgage at a rate of 15 per cent., the figures for the first year, net of tax relief at 30 per cent., are:

20 per cent. discount 1,014
30 per cent. discount 887
40 per cent. discount 760
50 per cent. discount 634

In so far as house purchasers require mortgages of less than 100 per cent. their repayments would be below the figure quoted.