The Local Authorities (Capital Finance and Accounting) (Amendment) (England) Regulations 2007

Social HomeBuy Disposal

7.  For the Schedule to the Principal Regulations (Social HomeBuy disposal)(1), substitute—

Regulation 1(5)

“SCHEDULE Social HomeBuy Disposal

1.   A Social HomeBuy disposal is a disposal by a local authority of a dwelling—

(a) to a purchaser who, immediately before the disposal, is a secure tenant of the local authority;

(b) which is not a disposal made under Part V of the Housing Act 1985 (right to buy)(2); and

(c) which is—

(i) the conveyance of the local authority’s freehold interest in the dwelling in accordance with paragraph 4;

(ii) the assignment of the local authority’s entire leasehold interest in the dwelling in accordance with paragraph 5;

(iii) the grant of a long lease of the dwelling in accordance with paragraphs 6 to 8; or

(iv) following such a grant, a subsequent disposal of an interest in the dwelling in accordance with paragraphs 7 and 8.

2.   Where—

(a) the grant of a long lease of a dwelling by a local authority to a purchaser is a Social HomeBuy disposal;

(b) the local authority owns the freehold interest in the dwelling;

(c) the local authority conveys the freehold interest to the purchaser; and

(d) immediately before the conveyance of the freehold interest, the purchaser owns the long lease granted by the local authority,

the conveyance of the freehold interest is also a Social HomeBuy disposal.

3.   Where—

(a) the grant of a long lease of a dwelling by a local authority to a purchaser is a Social HomeBuy disposal;

(b) the local authority owns a leasehold interest in the dwelling;

(c) the long lease granted is a sub-lease of the leasehold interest;

(d) the local authority assigns its entire leasehold interest to the purchaser; and

(e) immediately before the assignment of the leasehold interest, the purchaser owns the long lease granted by the local authority,

the assignment of the leasehold interest is also a Social HomeBuy disposal.

4.   A conveyance is in accordance with this paragraph if the purchaser pays to the local authority 100 per cent of the value of the freehold interest in the dwelling or of the cost of providing it, subject to any discount to which the purchaser is entitled.

5.   An assignment is in accordance with this paragraph if the purchaser pays to the local authority 100 per cent of the value of the leasehold interest in the dwelling or of the cost of providing it, subject to any discount to which the purchaser is entitled.

6.   Where the local authority grants a long lease of the dwelling—

(a) the local authority—

(i) owns the freehold interest in the dwelling and the long lease is a lease of the dwelling; or

(ii) owns a leasehold interest in the dwelling and the long lease is a sub-lease of the dwelling;

(b) the purchaser pays to the local authority a premium for the grant of the long lease (“the initial premium”), subject to any discount to which the purchaser is entitled;

(c) the initial premium is calculated by reference to a percentage (“the initial percentage”) of the value of the long lease of the dwelling or of the cost of providing it; and

(d) the initial percentage is at least 25 per cent.

7.   Where the local authority grants a long lease of the dwelling and the initial percentage is less than 100 per cent—

(a) the long lease includes provisions regarding the making by the local authority of a subsequent disposal of an interest in the dwelling to the purchaser in return for a further premium;

(b) where there is a subsequent disposal of an interest in the dwelling to the purchaser, the purchaser pays to the local authority the further premium, subject to any discount to which the purchaser is entitled;

(c) the further premium is calculated by reference to a percentage (a “further percentage”) of the value of the dwelling or the cost of providing it; and

(d) subject to paragraph 8, any further percentage is at least 10 per cent.

8.   The further percentage may be less than 10 per cent where the aggregate of the initial percentage and any earlier further percentage is at least 90 per cent.

9.   References in this Schedule to a purchaser, in relation to a dwelling, include the successors in title of the purchaser’s interests in that dwelling.”.

(1)

The Schedule was inserted by S.I. 2006/521.

(2)

1985 c. 68.