§ THE MINISTER OF STATE, BOARD OF TRADE (LORD DRUMALBYN)My Lords, your Lordships will recall that one of the main objectives of the Building Societies Act, 1960, was to ensure that building societies concentrated mainly on their proper and traditional rôle of lending money on the security of owner-occupied houses. It was found difficult to formulate a satisfactory legal definition of owner-occupied; the object was achieved however by creating the class of "special advances", to include all advances made by building societies to any corporate body (as distinct from advances made to individuals) and all advances of more than £5,000. Special advances were to be restricted in any year to a maximum of 10 percent. of a society's total advances. The Act contains power to vary the figure of £5,000.
Since 1960 not only has there been a general rise in the price of houses, 254 varying from one part of the country to another, but there has also been an in creasing demand for the more expensive type. There has been full consultation with all concerned, and agreement has been reached that the figure should now go up from £5,000 to £7,000, a figure which should remain appropriate for some time. I beg to move.
§ Moved, That the Building Societies (Special Advances) Order, 1963, be approved.—(Lord Drumalbyn.)
§ On Question, Motion agreed to.