Statutory Instruments

1996 No. 2256


The Social Landlords (Permissible Additional Purposes or Objects) Order 1996


6th September 1996

Laid before Parliament

10th September 1996

Coming into force

1st October 1996

The Secretary of State for the Environment, as respects England, and the Secretary of State for Wales, as respects Wales, in exercise of the powers conferred upon them by section 2(7) and (8) of the Housing Act 1996(1), and of all other powers enabling them in that behalf, hereby make the following Order:—

Citation and commencement

1.  This Order may be cited as the Social Landlords (Permissible Additional Purposes or Objects) Order 1996 and shall come into force on 1st October 1996.


2.  In this Order, unless the context otherwise requires—

Additional permissible purposes or objects

3.  The following are specified as permissible purposes or objects additional to those specified in subsection (4) of section 2 (eligibility for registration of social landlords)—

(a)disposing of houses by way of sale at less than the market value to residents of the social landlord;

(b)acquiring, or constructing, or repairing and improving, or creating by the conversion of houses or other property, houses to be disposed of pursuant to equity percentage arrangements;

(c)enabling or assisting any residents of the social landlord—

(i)to acquire, or to acquire and enter into occupation of, houses, or

(ii)to procure the construction of separate dwellings for occupation by those residents (whether alone or with other persons), or to procure such construction and enter into occupation of the dwellings so constructed, by—

(aa)providing grants to or for such residents, or

(bb)in a case falling within sub-paragraph (i) above, by entering into assured percentage arrangements with such residents (or partly in the one way and partly in the other).

Priority of mortgages

4.  A mortgage securing a person’s liability to make to a registered social landlord any payment required by an assured percentage covenant or equity percentage covenant shall have priority immediately after any legal charge securing an amount advanced to that person by a qualifying lending institution—

(a) for the purpose of enabling him to acquire the estate in question; or

(b) with the written consent of the social landlord, for the purpose of enabling him to carry out any improvement to the house in question.

Signed by authority of the Secretary of State for the Environment.

David Curry

Minister of State,

Department of the Environment

5th September 1996

William Hague

Secretary of State for Wales

6th Septemeber 1996

Explanatory Note

(This note is not part of the Order)

Section 2 of the Housing Act 1996 makes provision for the eligibility of certain bodies (such as charitable housing associations) for registration as social landlords with the Housing Corporation or, in Wales, Housing for Wales. Section 2(4) sets out certain permissible additional purposes or objects that such a body may have as a condition for registration.

This Order specifies further permissible additional purposes or objects that such body may have for the purposes of section 2(4) namely—

(a) disposing of houses to its residents at less than the market value;

(b) making certain kinds of disposal where the body obtains a mortgagee’s interest, the value of which is calculated by reference to a percentage of the value of the house from time to time (‘equity percentage arrangements’);

(c) the provision of certain kinds of financial assistance (for example, ‘assured percentage arrangements’) to enable or assist its residents to purchase houses or to procure the construction of self-contained accommodation for their occupation.

The Order also makes provision with respect to the priority of mortgages securing the liability of persons to make payments to registered social landlords required under the arrangements referred in paragraphs (b) and (c) above.

The additional purposes or objects specified by the Order correspond to the additional purposes or objects within section 4(3) of the Housing Association Act 1985 as provided for in SI 1994/2895 and SI 1996/592.


S.I. 1992/3218 to which there are amendments not relevant to this Order.


See section 2(6) of that Act of 1982 as added by regulation 4 of S.I. 1994/1694 for the definition of ‘EC company’ and section 95 of that Act for the definition of ‘insurance business’.


The term “the Corporation” means the Housing Corporation or, as the case may be, Housing for Wales; see section 56(1) of the Housing Act 1996.


1986 c. 53; see section 119(1) of that Act.


1992 c. 40; see section 116 of that Act.