Vol. 533 No. 3
228 Mr. Crawford asked the Minister for the Environment and Local Government the number of local authority tenants who are paying the fixed interest charge as imposed at the time of high interest rates; if he has any proposals to deal with the this issue; and if he will make a statement on the matter. [8913/01]
A survey of local authorities, carried out by my Department last year, indicated that some 44,000 individual fixed rate local authority housing loans were outstanding and that the average amount outstanding on individual loans was less than £5,200.
Borrowers with local authority fixed rate mortgages are free to redeem such loans without any interest rate penalty and refinance them in the private sector. This is a very significant concession, the cost of which must be borne by the Exchequer, the Housing Finance Agency or the local authorities. Borrowers with building society/bank fixed rate mortgages on the other hand are obliged to pay significant redemption penalties of up to six months' interest or more in the event of early redemption.
In the past five years, the amount outstanding to the local loans fund and the Housing Finance Agency in fixed interest rate loans has reduced significantly, from £509 million to £135.6 million, indicating that many borrowers have availed of this concession.
