§ Mrs. GormanTo ask the Secretary of State for the Environment (1) what action his Department is taking to promote the trial rents into mortgages scheme for Basildon new town tenants;
(2) what is the length of the experimental period of the trial Basildon new town corporation rents into mortgages scheme.
§ Mr. Michael SpicerI have invited the Commission for the New Towns to operate an experimental rents-into-mortgages scheme for its tenants at Basildon. This is an important and exciting experiment which marks a new stage in our commitment to extending opportunities for home ownership.
It will be aimed at tenants who would like to buy their home and can pay their full rent, but cannot afford the right to buy. The Commission will offer tenants the opportunity to buy their home for an initial payment 184W which much be at least the amount which they could borrow on a mortgage, with repayments equivalent to their rent. This initial payment will attract discount in accordance with the right-to-buy rules; tenants paying half the right-to-buy price will get half their right-to-buy discount.
The Commission will retain a charge over that part of the value of the property not covered by the tenant's payment and discount. The charge must be redeemed on the resale of the property or the death of the purchaser, but the purchaser will be free to make further payments to redeem or reduce the charge at any time. The amount needed to redeem the charge will be the appropriate proportion of the property's value at the time of redemption, less a discount of 20 per cent.
There is no set end-date for the scheme. Its progress will be monitored regularly.