Housing Act 1974

1 (1) In section 24 (right to opt for subsidy for certain loans in connection with dwellings) at the end of subsection (1) there shall be added the words “and

(d) the loan is not one to which a direction under subsection (3A) of this section for the time being applies”.

(2) In paragraph (c) of subsection (3) of that section (declaration by borrower as to use of land, etc.),—

(a) for the words " and the land " there shall be substituted the words " that the amount of the loan will not exceed the appropriate limit determined under section 24A of this Act and that, before the expiry of the period of 12 months beginning on the date referred to in paragraph (b) of this subsection, the land "; and

(b) for the words from " being the borrower " to " one of them) ", in the second place where those words occur, there shall be substituted the words " or persons in such circumstances that the residence condition in section 24B of this Act is fulfilled ";

and at the end of that paragraph there shall be added the words “and

(d) in a case where the specified person or persons named in a declaration under paragraph (c) above is, are or include the borrower or all or any of the joint borrowers, that, if the borrower or, in the case of joint borrowers, any of them is married and is not treated for income tax purposes as living apart from his spouse, the borrower or, as the case may be, each of those joint borrowers and (in either case) his spouse have signed and delivered to the lender a declaration either that there is no existing loan—

(i) the whole or any part of the interest on which is payable (whether alone or jointly with any other person) by the spouse, and

(ii) in respect of which an option notice for the time being has effect or in respect of which a claim for relief has been or is to be made under section 75 of the Finance Act 1972 (relief for payment of interest), and

(iii) which relates to, or was made with a view to the repayment of a previous loan which related to, land used wholly or mainly for the purposes of a dwelling (not being the dwelling to which the declaration under paragraph (c) above relates) which is that spouse's only or main residence or a caravan so used,

or that such a loan does exist but the spouse intends that, within the period of 12 months beginning on the date referred to in paragraph (b) above, the dwelling referred to in sub-paragraph (iii) above will cease to be the spouse's only or main residence”.

(3) At the end of subsection (3) of that section there shall be added the following paragraphs—

“(viii) the taking effect of a direction under subsection (3A) of this section with respect to the loan ;

(ix) if subsection (5) of section 24B of this Act applies, the expiry of the period of one month beginning with the date on which the lender receives a notification (or, if he receives more than one notification, the first notification) under that subsection or, if he does not receive such a notification, the date on which the lender first becomes aware that the residence condition is not fulfilled as mentioned in that subsection ;

(x) if subsection (6) of section 24B of this Act applies and the lender receives a notification in accordance with that subsection, the expiry of the period of twelve months beginning with the date specified in that notification, and if that subsection applies but the lender does not receive such a notification, the expiry of the period of one month beginning with the date on which the lender first becomes aware that the residence condition is not fulfilled as mentioned in that subsection ;

(xi) if the lender becomes aware that a declaration under paragraph (c) or paragraph (d) of this subsection is false in a material particular, the expiry of the period of one month beginning with the date on which the lender first becomes so aware.”

(4) After subsection (3) of that section there shall be inserted the following subsections:—

“(3A) The Secretary of State may, after consultation with such qualifying lenders or bodies representative of qualifying lenders of any description as may appear to him appropriate, direct that subsidy in accordance with this Part of this Act shall not be available in the case of any loan to which the direction applies, being a loan falling within subsection (3B) below.

(3B) A loan is one in respect of which a direction may be made under subsection (3A) above if the terms of the repayment contract (as originally entered into or as subsequently varied) are such that the amount due from the borrower for any period by way of interest under the repayment contract is less than the total of the interest which accrues in respect of that period, so that part of the interest is treated as an addition to the capital outstanding or is otherwise carried forward.

(3C) In considering whether to make a direction under subsection (3A) above with respect to any loan, the Secretary of State shall follow such principles, and take account of such matters, as he may from time to time decide after the like consultation as is specified in that subsection.

(3D) A direction under subsection (3A) above may be made with respect to a particular loan or loans or any description of loans, and, in so far as the direction relates to a loan in respect of which an option notice has already been given, the direction shall specify a date (being a date after the giving of the direction) with effect from which the direction is to take effect with respect to any such loan.

(3E) Any provision of subsection (3A) or subsection (3C) above which imposes on the Secretary of State a duty to consult any persons or bodies appearing to him to be appropriate shall not be taken as implying that further consultation is required by the provision where the Secretary of State is satisfied that there was consultation before the coming into force of that subsection and in his opinion that consultation was sufficient for the purpose”.

(5) In subsection (4) of that section for the words from " conditions specified in subsection (3)(c)" to the end of the subsection there shall be substituted the words " conditions specified in paragraphs (c) and (d) of subsection (3) of this section there are satisfied such other conditions as may be specified in the direction ; and where any such direction has effect in relation to an option notice, the provisions of subsections (5) and (6) of section 24B of this Act shall apply as if the reference therein to the residence condition were a reference to such a condition as may be so specified ".

(6) After subsection (5) of that section there shall be inserted the following subsection:—

“(5A) In the case of an option notice to which a direction under subsection (5) of this section applies, paragraph (c) of subsection (3) of this section shall have effect as if for the words from " before the expiry " to " to be occupied " there were substituted the words " the land in question is being and will continue to be used wholly or partly for the purposes of a dwelling occupied”.