I propose to take Questions Nos. 692, 706 and 738 together.
The interest rate on local authority fixed rate house purchase is related to the cost of long-term funds prevailing at the time the loans were advanced and is fixed for the life of the loan. A fixed interst rate of up to 12.5 per cent applied to loans issued before 1 December 1987. The cost of reducing the interest rates on these loans would be substantial and would have to be borne by either the Exchequer, the Housing Finance Agency or the local authorities.
However, any person with fixed rate local authority repayments whether for a house purchase loan or under a tenant purchase scheme is free to redeem without penalty and refinance, if necessary, in the private sector at the low rates currently available. This is a very significant concession which would not be available in respect of fixed rate loans from commercial lending agencies.
It is relevant to point that the maximum house purchase loan in these cases did not exceed £16,000 and the average price paid for a private house bought with these loans generally ranged between £16,000 and £25,000. Amounts paid under tenant pruchase schemes would generally have been much lower.
Information in relation to the amounts on loan at the various interest rates is currently being compiled and will be forwarded to the Deputy as soon as possible.