The Social Landlords (Additional Purposes or Objects) Order 1999

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(1).

(1)

S.I. 1996/2256.