HC Deb 26 June 1995 vol 262 cc539-41W
Mr. Denham

To ask the Secretary of State for the Environment if he will publish an analysis showing the cash sum received by a local authority and the effects on its(a) capital receipts and (b) total borrowing if a local authority were to repurchase a local authority leasehold property valued at (i) £30,000 in 1986 or (ii) £20,000 in 1982 and sold at full discount, and it is repurchased for (1) the original sale price or (2) the original sale price uprated in line with inflation. [30790]

Mr. Robert B. Jones

There will be no implications for capital receipts whether the flat is repurchased at the original sale price or the original sale price uprated in line with inflation.

The expenditure on repurchasing property will be capital expenditure for the purposes of part IV of the Local Government and Housing Act 1989. Capital expenditure may be financed out of credit approvals, usable capital receipts or revenue.

Mr. Denham

To ask the Secretary of State for the Environment if he will make a statement listing the construction types of local authority leasehold properties which are not normally mortgageable under current market conditions; and if he will estimate the total number of such properties which have been sold under right-to-buy legislation and voluntary sales by local authorities. [30792]

Mr. Jones

Decisions on mortgage lending are for the commercial judgment of, and vary between, individual lenders.

Mr. Denham

To ask the Secretary of State for the Environment if he will place in the Library a copy of all the responses received to the consultation on the leasehold exchange scheme and the extension of mortgage indemnified by local authorities. [30794]

Mr. Jones

I will place a list of respondents in the House Library. Copies of individual responses can be obtained from the Department of the Environment central library.

Mr. Denham

To ask the Secretary of State for the Environment what assessment he has made of the number of council leaseholders who will be eligible for assistance under(a) the leasehold exchange scheme and (b) the extended powers of local authorities to issue mortgage indemnities. [30791]

Mr. Jones

(a) Research carried out for my Department in 1994 showed that, of 168,000 leaseholders who had bought council flats, under 2 per cent. had difficulty in reselling. The number eligible for the exchange sale scheme will depend on how many people meet the criteria set out in the regulations which were laid before Parliament on 19 June.

(b) Mortgage indemnities are designed to facilitate lending in areas where lenders are otherwise reluctant to operate. It is for each authority to decide in the light of the individual circumstances of each case whether a mortgage indemnity would be appropriate.

Mr. Denham

To ask the Secretary of State for the Environment what estimate he has made of the average mortgage which will be required by a council leaseholder seeking to take advantage of the leasehold exchange scheme. [30793]

Mr. Jones

None. This would depend on a wide range of factors including individual leaseholders circumstances and the arrangement made between them and their local authorities.

Mr. Denham

To ask the Secretary of State for the Environment what regulations exist limiting total value of loans which can be identified by a local authority; what estimate he has made of the total value of loans indemnified by local authorities; and what assessment he has made of the extent to which local authorities' ability to extend mortgage indemnities will be restricted by the level of their existing indemnities on loans for those and other purposes. [30795]

Mr. Jones

There are no regulations limiting the total value of loans which can be indemnified by a local authority under section 442 of the Housing Act 1985. Estimates based on local authorities' returns to my Department indicate that in the period 1 April 1986 to 31 December 1994, local authorities entered into indemnity agreements with a total value of £48 million in respect of over 2,600 properties, and that in the same period some 90 agreements with a total value of just under £1 million were invoked. There is no obvious reason why local authorities' ability to enter into further indemnity agreements should be restricted by the level of existing agreements.