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House Building

Volume 885: debated on Monday 27 January 1975

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asked the Secretary of State for the Environment whether he is yet in a position to announce new initiatives on private sector housing.

I have agreed, in discussion with the building societies and the house builders, a number of measures designed to get the building of more houses started; to get the existing stock of unsold houses into use; and to help first-time buyers.1. The Government are committed to the principle of stabilisation of mortgage finance. The £500 million short-term loans scheme last year was a first step in this direction. The indications are that the current favourable trends in the inflow of funds to the building societies will continue and should enable them to build up a reserve of liquidity. But if a situation should unexpectedly develop in which the continued availability of funds for house purchase was at risk the Government would in discussion with the building societies and house builders work out joint measures to stabilise the position including, if appropriate, the making of further short-term loans. On this basis the Building Societies Association see no obstacle to their providing mortgage funds for an adequate programme of new houses.2. A deferred payment scheme for first-time purchasers will be put into effect as soon as possible. My Department is issuing today the relevant details and a copy will be available in the Library.3. The maximum house valuation for the option mortgage guarantee scheme will be increased from £7,500 to £12,000.4. The possibilities of increasing construction loans by building societies to builders will be urgently considered, together with the building societies case for an increase in the special advance limit of £13,000 for lending to individuals.5. Local authorities will be urged to handle planning applications for housing development quickly and to look imaginatively at the provision of lower priced housing, conventional or non-conventional at higher densities.In view of the need to get the market in unsold houses in the higher price range moving, the Chancellor of the Exchequer has authorised me to say that he has no plans to withdraw tax relief at the higher rates on mortgage interest in his next Budget. Any such withdrawal of relief would, of course, be accompanied by suitable transitional provision for the protection of existing mortgagors.Home loans by local authorities of course remain available to priority categories of borrowers. I am reviewing urgently the high mortgage rates of some local authorities.