asked the Minister of Housing and Local Government whether, in view of the heavy professional charges, legal, valuation and architectural, involved when purchasing land or houses and the necessity to increase house purchase by people of moderate means, he will take the necessary steps to reduce the burden of professional charges on such transactions.
I am aware that these charges make a significant addition to the amount which the mortgagor must find as deposit, but necessary professional services have got to be paid for. The arrangements I announced to the House last week should help greatly to reduce the initial outlay required from the purchaser.
Is the right hon. Gentleman aware that these professional fees are charged on a percentage basis, that building costs generally, and land in particular, have gone up about three or four times and that these professional charges have likewise increased and form a very substantial burden these days?
There is, of course, very great variation in the amount of work to be done in these cases. There are variations, for instance, in regard to whether the land is registered or not, whether the search for title is difficult or not, whether the property is bought from a council estate and so on. Therefore, while I am trying hard to get these further reductions, one cannot have a flat rate basis because of those great variations. One has to try to get an average as the basis.
Does the Minister agree that the professional charges are out of all relation to other charges, particularly in regard to building houses? If so, will he give further consideration to my hon. Friend's Question with regard to what action should be taken?
No, Sir. I would not agree with such a sweeping indictment as that in regard to those concerned. I think that, on the whole, the professions have helped in every way, and will help still more.
Is the Minister quite satisfied that when the purchase price of the house is high, the legal charges should go up in proportion? The public is not convinced that the legal work involved is proportionately greater.
We are doing our very best to get them reduced, but the charges are related, not merely to the cost, but to the amount of work which has to be done with regard to a number of points, such as, for instance, the question of title.
asked the Minister of Housing and Local Government what steps he proposes to take, by financial guarantee or otherwise, to make it possible for local housing authorities to make advances of up to 95 per cent, for house purchase under similar terms to those agreed with the building societies.
This would involve legislation. I would prefer first to try the effect of the arrangements I announced to the House last week, which involve no change in the present law.
Would not the Minister agree that the present position is rather invidious, where local authorities are asked to guarantee a proportion of the advances made by building societies whilst they themselves are not allowed to advance to the same extent? As he is dependent on the co-operation of local authorities, does he not think that, in the interests of his own scheme, it would be a good thing to get by legislation the powers he needs?
There are a lot of desirable things about which we could get legislation. If it came forward, I hope that it would command the same support from the hon. Gentleman, but he knows quite well that, at present, the obvious thing to do is to work within the powers already existing.
Is the Minister aware that a number of local authorities appear very chary about assisting him in his scheme with all its advantages, whilst they themselves are deprived of the powers mentioned in my Question?
They have substantial powers which I hope they will use to the full.
Is the Minister not aware that local authorities are restricted under the Small Dwellings Acquisition Act? Under his new circular they are, in fact, required to give guarantees to private enterprise out of public funds. Is it not really fair that they should at least be on an all-square footing with private enterprise?
I do not want to get drawn into an argument about this. I am sure the hon. Member will agree that if private and public effort can be combined to get the thing done without legislation, that is the first thing to do.
asked the Minister of Housing and Local Government how much less cash an intending house purchaser will have to find under his new scheme for a 95 per cent, advance on a post-1918 house, for a house costing £2,000, than he would have to find under the most advantageous systems already practised by building societies.
As their prospectuses show, the amount which building societies will lend varies with the circumstances of the individual application. But an advance of 85 percent, without other security besides the house would be exceptional; the normal advance is considerably lower. Thus, under the scheme referred to by the hon. Member, the cash to be found by the borrower would be reduced by at least £200.
Is the Minister aware that his new scheme does not cover legal costs? There is to be a 95 percent, advance, excluding legal costs. Is he not aware that some building societies already operate schemes whereby 90 percent, is advanced, including legal costs? In that case, the extra 5 percent, no more than makes up for the legal costs and his scheme is not all that much more advantageous.
Of course there can be variations and differences. I do not understand whether hon. Members who ask these questions are trying to denigrate the scheme or to assist it. I say that it is an advance and an attempt to improve the position.
I am not denigrating the scheme. All I am doing is pointing out that people can already get more help than they realise from certain building societies.
That is a case of damning with faint praise.