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National Housing Finance Agency

Volume 884: debated on Wednesday 15 January 1975

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asked the Secretary of State for the Environment if it is still the Government's policy to create a National Housing Finance Agency; what its functions will be in relation to first-time house buyers; and what its relationship to the building societies movement will be.

I would refer the hon. Member to the reply given to the hon. Member for Melton (Mr. Latham) on 2nd December 1974.—[Vol. 882, c. 388.]

In view of the continuing recession in house building, as evidenced by the latest figures, would it not be a particularly good idea to get the market moving at what I might call the bottom end? Would not the provision of preferential mortgages for first-time buyers be a real step in that direction? Finally, how long after the General Election promise of the Labour Party to assist these people will we have to wait for it to be realised?

This Government have already given enormous assistance through the £500 million loan to the building societies, as a result of which mortgage lending is now running at a monthly rate about double what it was before the loan. However, I agree with the hon. Gentleman that it is crucial to get the market moving at the lower end. That is why, on top of the £500 million loan and despite the much healthier flow of mortgage finance now as compared with a few months ago, I am discussing with the building societies and the builders what additional steps we might take to achieve the end in view.

Does my right hon. Friend recognise the truth of the old Lancashire saying "There's nowt so safe as houses"? Will he therefore propose to the building societies that they grant 100 per cent. loans, as many local authorities already do? This would do more than anything else to get the private house market moving.

I take my hon. Friend's point, which has been much discussed. However, having studied the question of what are the real limitations on the lower end of the market, I have become more and more convinced that it is not the lack of 100 per cent. mortgages, it is not the 11 per cent. interest rate or the size of the deposit, but is the general state of uncertainty created by the world economic situation. If people cannot see in what sort of job or position they are likely to be a year from now, they are reluctant to take on the risk of buying a house.