HC Deb 11 May 1989 vol 152 cc493-4W
Mr. Bill Walker

To ask the Secretary of State for Scotland whether he has any plans to introduce measures to increase opportunities for home ownership in Scotland; and if he will make a statement.

Lord James Douglas-Hamilton

I intend to ask Scottish Homes to introduce by October 1989 a rents to mortgages scheme for the tenants of their existing houses. It will also be open to any new town tenants who may elect to transfer to Scottish Homes under tenants' choice arrangements. This scheme will run for a trial period of three years.

The new scheme will complement the existing statutory right to buy scheme. It will not compete with it, and is aimed at that specific group of tenants who would like to own their own home but who cannot afford to do so even with the discounts available under right to buy. It is not our intention, however, to draw into owner-occupation those who cannot afford it and the scheme will not be available for those tenants dependent on housing benefit.

Tenants who participate will buy their homes by means of a normal repayable mortgage calculated by reference to their present rental outgoings increased to reflect the added benefits stemming from owner occupation, but also adjusted to reflect their added financial responsibility for the future upkeep of their homes. As with right to buy, tenants will benefit from an immediate discount on the purchase price of their property. This will be calculated on the same basis as right to buy discounts, but at a level 15 percentage points less. The remaining finance required will be covered by a deferred loan from Scottish Homes on which there will be no repayments until it is redeemed, for example, on subsequent sale of the House by the owner.

The outstanding loan to Scottish Homes, will be abated each year by an additional discount, up to the maximum right-to-buy discount level minus 15 percentage points. However the final repayment due to Scottish Homes will be based on the level of the outstanding loan amount and on the market value of the house at the date of that repayment: incentives will be introduced to ensure that the house is properly maintained.

I shall be consulting Scottish Homes immediately about the detailed arrangements.