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MORTGAGES of up to 80 per cent will be available for buyers of the first sandwich-class flats which go on sale today.

  But a critic said the flats would still be out of reach of many.

  The Housing Society announced yesterday the eight banks which took part in the current loan scheme had agreed in principle to lend up to 80 per cent.

  Ambrose Lam Shui-kong, the society's director of finance and administration said: 'The banks are willing because the risk to them will be the same as the normal 70 per cent mortgage.

  'This is because the Housing Society is providing a guarantee on the excess of mortgages over 70 per cent,' he said.

  The 1,024 Tivoli Garden flats on Tsing Yi Island cost between $1.18 million and $2.2 million. They are sold at a 33 per cent discount to market value. Applications are open from today, ending on January 6.

  The society is set to have a surplus of more than $350,000 per flat.

  The hundreds of millions of dollars in surplus has drawn criticism from legislators who want greater government supervision of the society's future pricing of sandwich-class housing.

  Mr Lam said the banks were taking part, because it was a government initiative to address the needs of the middle-class income group.

  'Because we have a very stringent screening process and resale restrictions, buyers of our flats will be true homeowners and not speculators - that is why the risks to the banks are acceptable,' he said.

  The banks are Hang Seng Bank, Standard Chartered Bank, Bank of East Asia, Dah Sing Bank, Bank of America, Shanghai Commercial Bank, Kincheng Banking Corporation and ABN AMBRO Bank.

  Mr Lam said the Housing Society had studied the costs of the down payment and monthly repayments and believed a 20 per cent down payment was affordable to the sandwich-class.

  He said the society's analysis showed that with 80 per cent mortgage, eligible families with household incomes of $22,000 to $44,000 could afford to buy flats of different sizes.

  But the chairman of the Association for Democracy and People's Livelihood, Frederick Fung Kin-kee, said an 80 per cent mortgage was still too low for buyers.

  'Of course it is better than 70 per cent, but a down payment of 20 per cent is beyond the reach of many.'   The legislator said that the Housing Authority's Home Ownership Scheme was able to provide mortgages of up to 95 per cent.

  'It's a similar scheme so why can't the Housing Society arrange to raise the mortgage up to at least 90 per cent - I think neither the society or the Government is willing to act as guarantor,' he said.

  Tivoli Garden, due to be completed at the end of next year, is the first development to be launched under the sandwich-class housing scheme.

  Over the next three years the society will provide more than 10,000 flats to middle-income families.

  The Housing Society is offering a further 52 flats for sale from today, on a first-come-first-serve basis.

  The units at Prosperity Court, Prince Edward - a project under the society's Urban Improvement Scheme - range from 459 square feet to 550 square feet with average price per square foot of $4,357.



80pc mortgage offer for discount flats