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Mr. Austin Mitchell
asked the Chancellor of the Exchequer whether he will provide an estimate of the saving to the Exchequer in a full year at the proposed rates of tax for 1987–88 of offsetting investment income against mortgage interest payments for relief from income tax.
Mr. Norman Lamont
The extent of any saving would depend upon the precise rules proposed for offsetting investment income against payments of mortgage interest and, in particular, on the way in which this restriction would impinge on the system of mortgage interest relief at source (MIRAS).
| Mortgage Advances by Building Societies | |||||
| Year | Advances for all purposes net of repayments | Gross advances for all purposes | of which: Gross advances for purchase of dwellings | Total estimated purchase price of dwellings on which advances in C were made | C as A percentage of D |
| (A) | (B) | (C) | (D) | (E) | |
| £ million | £ million | £ million | £ million | per cent. | |
| 1983 | 10,928 | 19,263 | 17,197 | 25,119 | 68·5 |
| 1984 | 14,572 | 24,034 | 21,537 | 31,522 | 68·3 |
| 1985 | 14,711 | 26,491 | 23,275 | 33,405 | 69·7 |
| 1986 | 19,072 | 36,619 | 31,407 | 45,055 | 69·7 |
Sources:
Financial Statistics—Tables 7·6 and 7·8.
Housing and Construction Statistics—Tables 1·9 and 1·13.