Declaration of Local Average Interest Rate for Local Authority Mortgages

CORPORATE MATTERS

DECLARATION OF LOCAL AVERAGE INTEREST RATE FOR LOCAL AUTHORITY MORTGAGES

Under the provisions of the Housing Act 1985, Section 438 and Schedule 16 (3), and the Local Government and Housing Act 1989, Schedule 11, the Council is required to declare for every period of six months a "local average rate of interest" in respect of mortgages arranged since 3 October 1980.

This rate is calculated in accordance with the provisions of "The Local Authority Mortgage Interest Rates Determination 2009" issued by the Secretary of State and is the average annual rate of interest payable on the amount outstanding by the way of money borrowed by the Council (other than short-term borrowing), plus 0.25%.

The rate so determined for the six months’ period commencing 1 April 2023 is 3.59% p.a., the same rate as determined for the previous six months’ period.

Authorities must charge the higher of their local average rate or the Standard National Rate set by the Secretary of State on all mortgages arranged since 3 October 1980. In February 2004 permanent approval was granted by the Housing Portfolio Holder to allow the Council to apply a standard rate of interest to all council mortgages irrespective of the date of advance.  The Standard National Rate is currently 3.13% p.a., lower than the calculated local average rate, and the rate to be   applied to all Council mortgages with effect from 1 April 2023 will be the local average rate of 3.59% p.a.  

For further information on this item please contact Pat Henshaw on extension 6551.