[6 The lending limit]
Building Societies Act 1986 (1986 c 53) | Legislation

[Making loans]

[6  The lending limit]

[(1)     A building society shall secure that the difference between—

(a)     the value of X on any quarter day; and

(b)     the value of Y on that day or the value of Y on the immediately preceding quarter day, whichever is the greater,

does not exceed 25 per cent of that value of X.

(2)     For the purposes of subsection (1) above—

X = the difference between the total assets of the society and any subsidiary undertakings of the society as shown in the society's accounts and the aggregate of—

(a)     the liquid assets of the society and any such undertakings as shown in those accounts . . .;

(b)     the fixed assets of the society and any such undertakings as so shown; and

(c)     where any such undertakings are [effecting or carrying out contracts of insurance], such of their assets as shown in those accounts as represent long term insurance funds; and

Y = the principal of, and interest accrued on, loans which are owed to the society or any subsidiary undertaking of the society and are fully secured on residential property;

and for the purposes of this subsection

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