§ Mr. Weetch
asked the Chancellor of the Exchequer what steps he is taking to ensure that building society borrowers are not forced to increase their repayments when mortgage interest relief at source is introduced.
§ Mr. Ridley
Section 28 of the Finance Act 1982 permits building societies to propose a change in the pattern of borrowers' repayments so that net payments under the new mortgage interest relief arrangements are at a constant level unless interest or tax rates change. The legislation makes it clear that borrowers are not forced to accept such a proposal, and that they have the right not to pay more under the new arrangements than they would have had to pay if the society had not made the proposal. Building societies which propose the change are required to give the borrower a notice setting out their proposal and the borrower's rights.