The Housing (Right to Buy) (Priority of Charges) (Wales) Order 2005

This Order specifies four bodies as approved lending institutions for the purposes of section 156 of the Housing Act 1985 (priority of charges on disposals under the right to buy) in addition to the bodies already specified in that section or in previous Orders. Section 156 of the Housing Act 1985 is exercisable by the National Assembly for Wales by virtue of the National Assembly for Wales (Transfer of Functions) Order 1999.

Section 156 provides that the liability to repay discount that may arise under a covenant by the tenant which is required by section 155 of the 1985 Act constitutes a legal charge on the dwelling-house but that a legal charge securing an amount advanced to the tenant by an approved lending institution for the purpose of enabling the tenant to exercise the right to buy has priority over it.

Approved lending institutions for the purposes of the section are building societies, banks, insurance companies, friendly societies and any other body which is specified, or is of a class or description specified, in an order made, in relation to Wales, by the National Assembly for Wales.

Such bodies also become approved lending institutions for the purposes of section 36 of the 1985 Act (priority of charges on voluntary disposals by local authorities) and section 12 of the Housing Act 1996 (priority of charges on voluntary disposals by registered social landlords).

In addition, as section 156 of the Housing Act 1985 is applied by section 171A (cases in which right to buy is preserved) of that Act to cases in which a tenant’s right to buy is preserved and by section 17 (right of tenant to acquire dwelling: supplementary provisions) of the Housing Act 1996 to cases in which a tenant has the right to acquire under section 16 (right of tenant to acquire dwelling) of that Act, the specified bodies become approved lending institutions for the purposes of those rights.