161 Loans in pursuance of building agreements.E+W+S
(1)This section applies where an urban development corporation enters into an agreement with a person (“the builder") by which provision is made—
(a)authorising the builder to enter on land belonging to the corporation for the purpose of the builder erecting a building on the land;
(b)for the sale of the land to the builder, if the building is erected to the satisfaction of the corporation, or, as the agreement may provide, for the grant of a lease to him if the building is so erected;
(c)for the corporation to lend money to the builder for the purpose of enabling him to erect the building;
(d)for securing that, on such a sale or, as the case may be, grant of a lease, any amount lent as mentioned in paragraph (c) above will, together with the interest on the loan, be secured by a mortgage of the land (or in Scotland standard security over the land).
(2)In that case the corporation may, subject to this section, lend money to the builder for the purpose mentioned in subsection (1)(c) above.
(3)The amount of the principal of a loan made under this section shall not exceed whichever of the following is less:—
(a)three quarters of the value of the land at the time the agreement mentioned in subsection (1) above is made;
(b)one half of the amount which it is estimated will be the value of the security for the mortgage (or in Scotland of the security subjects) for which the agreement provides when the building for the erection of which the loan is made has been erected.
(4)Subsections (4) and (5) of section 160 above apply to a loan made under this section as to one made under that.