The right to acquire on rent to mortgage terms cannot be exercised if the minimum initial payment in respect of the dwelling-house exceeds the maximum initial payment in respect of it.
The maximum initial payment in respect of a dwelling-house is 80 per cent. of the price which would be payable if the tenant were exercising the right to buy.
The minimum initial payment in respect of a dwelling-house which is a flat is 80 per cent. of the amount which would be the minimum initial payment in respect of the dwelling-house if it were a house.
The relevant amount and multipliers for the time being declared for the purposes of this section shall be such that, in the case of a dwelling-house which is a house, they will produce a minimum initial payment equal to the capital sum which, in the opinion of the Secretary of State, could be raised on a 25 year repayment mortgage in the case of which the net amount of the monthly mortgage payments was equal to the rent at the relevant time calculated on a monthly basis.
For the purposes of subsection (6) the Secretary of State shall assume—
In this section—
" net amount ", in relation to monthly mortgage payments, means the amount of such payments after deduction of tax under section 369 of the Income and Corporation Taxes Act 1988 (mortgage interest payable under deduction of tax);
" qualifying maximum " means the qualifying maximum defined in section 367(5) of that Act (limit on relief for interest on certain loans);
" relevant amount " means the amount which at the relevant time was for the time being declared by the Secretary of State for the purposes of this section;
" relevant time " means the time of the service of the landlord's notice under section 146 (landlord's notice admitting or denying right);
" rent " means rent payable under the secure tenancy, but excluding any element which is expressed to be payable for services, repairs, maintenance or insurance or the landlord's costs of management.