Vol. 513 No. 6
341 Mr. Sargent asked the Minister for the Environment and Local Government his views on the merits of establishing an affordable house purchase scheme for long-standing tenants in view of the difficulties for a family on an average industrial wage of securing a house purchase loan; and the level of assistance, if any, he will put in place to make this scheme work. [3293/00]
A tenant of a local authority house for at least one year may apply to the local authority to purchase the house. The price of the house is based on its market value, as determined by the local authority. Any increase in the market value due to improvements by the tenant are disregarded in calculating the price. To assist long-term tenants to purchase their homes a discount of 3% of the value of the house is allowed for each year of tenancy, up to a maximum discount of 30% plus an additional discount of £3,000. In addition, a shared ownership option is available to enable a tenant to buy a share in the house now and the remainder within 25 years.
A tenant who surrenders local authority or voluntary housing accommodation is eligible to purchase a home under the affordable housing and shared ownership schemes. Under the affordable housing scheme, houses are offered for sale at cost price and mortgage finance at favourable interest rates applies. Under the shared ownership scheme purchasers buy at least 40% of the value of the house and rent the remaining share. A subsidy is available under both schemes for households with incomes of up to £16,000 per annum.
