HC Deb 27 October 1982 vol 29 c449W
Mr. Oakes

asked the Secretary of State for the Environment if he will bring the mortgage interest rates paid by purchasers of new town and council houses under the Housing Act 1980 into line with the current building society rates.

Mr. Stanley:

Purchasers of new town and council houses under the Housing Act 1980 who have a mortgage with the selling authority are already charged the same interest rate as most building society mortgagors—the standard national rate—provided that this does not involve the authority in lending at a loss. The Act requires the Secretary of State to keep the standard national rate for local authorities in line with building society rates: the same rate is also applied to new towns. Otherwise, the authority must charge a rate related to its own borrowing costs, plus ¼ per cent. allowance for administrative expenses.

Mr. Oakes

asked the Secretary of State for the Environment what is the average interest rate paid by purchasers of houses under the Housing Act 1980 in the area of Runcorn, Warrington new town and Central Lancashire new town.

Mr. Stanley:

For purchasers with mortgages granted by the new town development corporation, the interest rate from 1 October 1982 is 14 per cent. at Central Lancashire and 13½ per cent. at Warrington and Runcorn.

For house purchasers with mortgages from other sources the interest rate will depend upon the rate charged by the lenders.

Mr. Oakes

asked the Secretary of State for the Environment what representations he has received about the operation of section 110 of the Housing Act 1980; and if he intends to bring in legislation to amend that section of the Act.

Mr. Stanley:

My right hon. Friend has received a number of representations about the operation of section 110 of the Housing Act 1980 from hon. Members, local authorities, and members of the public. Most of those representations have concerned the level of interest rates, differences between the rates of interest charged by local authorities as compared with building societies, or differences between the rates of interest charged by an authority to different groups of borrowers. The Government have no plans at present to amend this section of the Act, but I have been encouraging both local authorities and new town corporations to suggest to individuals with public sector mortgages that they convert these into mortgages with building societies and banks. A number of local authorities and new towns are doing so.