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Mortgages

Volume 890: debated on Monday 21 April 1975

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asked the Secretary of State for the Environment what advice Ministers have given, directly, or through the Joint Advisory Committee to the Building Societies Association or individual building societies within the last three months about imposing quantitative ceilings on mortgage advances in order to restrain house prices; and what is his policy on this matter.

The Government and the Council of the Building Societies Association have agreed on a further step towards achieving their joint objectives of stabilising the flow of mortgage funds and avoiding an excessive increase in house prices.Building societies are planning their lending policies so as to support an active housing market during 1975 and this could involve lending at a somewhat higher level than the current monthly rate. The agreed arrangements, by providing for adjustment in lending, are aimed at averting a house price explosion.In addition to their lending during 1975, the aim of societies will also be to set aside adequate funds for the maintenance of a high and stable level of lending for house purchase in the future. The Government and the Building Societies Association believe that in this way builders can be assured there will be mortgages available for new houses, and that this will encourage them to commit resources to a programme of new construction.