Statutory Instruments
HOUSING, ENGLAND AND WALES
Made
25th March 1999
Laid before Parliament
29th March 1999
Coming into force
19th April 1999
The Secretary of State for the Environment, Transport and the Regions, as respects England, and the Secretary of State for Wales, as respects Wales, in exercise of the powers conferred upon them by section 2(7) of the Housing Act 1996(1), and of all other powers enabling them in that behalf, hereby make the following Order:-“
1. This Order may be cited as the Social Landlords (Additional Purposes or Objects) Order 1999 and shall come into force on 19th April 1999.
2. Providing loans secured by mortgages to assist persons to acquire houses for their own occupation is hereby specified as a permissible purpose or object additional to those specified in section 2(4) of the Housing Act 1996(2) (eligibility for registration as a social landlord).
3.-(1) Where-“
(a)a social landlord provides an equity percentage loan secured by an equity mortgage to assist a person ("the mortgagor") to acquire a house for his own occupation; and
(b)a qualifying lending institution also provides a loan secured by a mortgage to that mortgagor to assist him to acquire that house,
the mortgage mentioned in sub-paragraph (a) shall have priority immediately after the mortgage mentioned in sub-paragraph (b).
(2) Where the mortgagor, for the purpose of enabling him to carry out any improvement to the house in question, and with the written consent of the social landlord, acquires a further advance secured by the mortgage mentioned in sub-paragraph (b) of paragraph (1), the priority of that mortgage shall remain unchanged.
(3) For the purposes of this article -“
"agreed percentage" means a percentage agreed between the social landlord and the mortgagor;
"equity mortgage" is a mortgage under which, in consideration for an equity percentage loan, the mortgagor agrees that on the loan becoming repayable he shall pay to the social landlord an amount which is equal to the agreed percentage multiplied by the value of the house, as determined in accordance with the terms of the mortgage, at the date on which the loan becomes repayable;
"equity percentage loan" is a loan which is equal to the agreed percentage multiplied by the value of the house as determined by the social landlord when the loan is made;
"qualifying lending institution" has the same meaning as in article 2 of the Social Landlords (Permissible Additional Purposes or Objects) Order 1996(3).
Signed by authority of the Secretary of State for the Environment, Transport and the Regions
Hilary Armstrong
Minister of State,
Department of the Environment, Transport and the Regions
24th March 1999
Signed by authority of the Secretary of State for Wales
Jon Owen Jones
Parliamentary Under Secretary of State, Welsh Office
25th March 1999
(This note is not part of the Order)
Section 2 of the Housing Act 1996 specifies the bodies that are eligible for registration as social landlords. For two categories of body (a society registered under the Industrial and Provident Societies Act 1965 and a company registered under the Companies Act 1985) the section sets out conditions that must be satisfied for registration. In addition to the core purposes or objects, there are permissible additional purposes or objects.
This Order specifies a further permissible additional purpose or object for such a body, namely, the provision of loans secured by mortgages to assist persons to acquire houses for their own occupation. The Order also makes provision with respect to the priority of certain mortgages entered into under the additional purpose or object.