§ Mr. FrenchTo ask the Secretary of State for Scotland if he has any plans to promote his rents to mortgages scheme; and if he will make a statement.
§ Lord James Douglas-HamiltonMy right hon. and learned Friend the Secretary of State for Scotland announced on 30 October that Scottish Homes is now able to consider applications to purchase under the rents to mortgages scheme. This is a pilot scheme scheduled to run for three years during which time its results will be monitored carefully to ensure that any promotional opportunities are quickly identified and acted upon.
§ Mr. FrenchTo ask the Secretary of State for Scotland if he will estimate the amount a tenant, paying an average Scottish council home rent, would pay if the tenant participated in his Department's rents to mortgages scheme, showing the method of calculation.
§ Lord James Douglas-HamiltonThe scheme introduced by Scottish Homes does not apply to tenants of local authorities. The method of calculation would follow that outlined in the Scottish Homes booklet on rents and mortgages placed in the Libraries of the House of Lords and House of Commons. However the calculation following demonstrates the notional financial arrangements which would apply to a tenant of a local authority house (rather than flat) paying rent at the level of the average council house tenant, whose discount entitlement is that of the average council house tenant and whose home has a market value of the sale of the average council house in Scotland.
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Average Market Value of House £23,975.00 RTM Discount (Equivalent RTB discount less 15 per cent. points) 36 per cent. Therefore Purchase Price £15,344.00 Weekly Rent1 £18.79 Sum Available for Mortgage Repayment (weekly) (Rent + 10 per cent. less £5 per week) £15.67
Average Amount of Mortgage Supportable (Assumes interest at 13.75 per cent.) £6,668.00 Deferred Financial Commitment £8,676.00 1This is the average rent for all council homes in Scotland.