Citation and commencement

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.

Additional permissible purpose or object

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).

Priority of mortgages

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).

Explanatory Note

(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.