HC Deb 04 May 1954 vol 527 cc188-91
33. Brigadier Clarke

asked the Minister of Housing and Local Government if he is yet in a position to make a statement about the means of making house ownership possible for those who have not got the necessary capital to make a large deposit but have adequate income to repay the loan.

Mr. H. Macmillan

Yes, Sir. After consultation with the associations of local authorities and the Building Societies' Association, I am urging county councils and local housing authorities to make full use of their powers under the Small Dwellings Acquisition Acts and Sections 4 and 5 of the Housing Act, 1949. In particular, I am recommending each of these authorities to operate two complementary schemes of guarantee which have been worked out with the Building Societies' Association. Under these schemes the authority and my Department will share, as equal partners with the building society, the extra risk involved in the building society's making a bigger advance than it could make without a guarantee. The first scheme contemplates a building society advance of 90 per cent, on any dwelling valued at up to £2,500; the second, a building society advance of 95 per cent, on any post-1918 dwelling valued at up to £2,000. Full particulars are given in a circular which is being sent to authorities tonight. Copies have been placed in the Library of the House. The circular also urges all the authorities mentioned to use to the full their powers to make advances themselves for house purchase and other purposes. I hope hon. Members on all sides of the House will do their utmost to help me to persuade local authorities to make all these facilities freely available and so encourage this excellent form of personal saving.

Brigadier Clarke

Does my right hon. Friend appreciate the great satisfaction which his statement will give not only in my constituency but to thousands of people all over the country who are only too anxious to own their own houses?

Mr. Fernyhough

Is the Minister not aware that high interest rates are the greatest drawback to house ownership? Will he have a word with the Chancellor of the Exchequer and ask him to reduce the Bank rate so as to enable building societies to follow suit?

Mr. Macmillan

I would have thought the rather large deposit represented the main difficulty. If we can bridge that gap by requiring a smaller amount of deposit, we shall make an advance towards what all sides of the House want to achieve.

Mr. H. Nicholls

Will my right hon. Friend keep in mind that the problems in the past in house purchase have been, on the one hand, the size of the deposit, which we hope the present announcement will deal with, and on the other hand, the rate of repayment? If we pursue a line of encouraging people now on a waiting list to switch from being subsidised tenants to the purchase of houses, have we not to produce some scheme to reduce not only deposits but the rate of repayment?

Mr. Macmillan

If my hon. Friend will look at the scheme when published, he will find that it sets out in detail proposed schemes of repayment.

Mr. MacColl

In view of the invitation to local authorities to invest more money in privately-owned houses, can the Minister give advice to them how to maintain the quality of houses?

Mr. Macmillan

Local authorities are asked either to implement their existing powers to make advances of money or to operate the new scheme of guarantees, which may not cost them any money, except if there is bad debt. I hope that they will advance along both lines. As to the quality of houses, that is taken into account when the original contract is entered into and the valuation is made by the building society.

Mr. John MacLeod

Will the new scheme cover Scotland?

Mr. Macmillan

I have made an announcement for the territories for which I am responsible.

Mr. Wade

Does the proposed scheme apply solely to building societies, or also to banks and other institutions accustomed to making loans to prospective purchasers of houses?

Mr. Macmillan

In the first instance I thought the best scheme was to get the local authority associations and the Building Societies' Association together. If they are all agreed—and we are only setting out typical schemes—we can begin to work with all people who are prepared to operate along the same lines.

Mr. Woodburn

Will the Secretary of State make a statement in regard to Scotland?

Mr. Macmillan

The best course would be for the right hon. Gentleman to put down a Question to my right hon. Friend.

Mr. Woodburn

Are these matters decided by the Government as a whole, or do Ministers decide them separately?

Mr. Macmillan

Housing legislation, as the right hon. Gentleman knows perfectly well, is different in Scotland from the Housing Acts under which I am operating, and which do not apply to Scotland.

Mr. Jay

Is not the Secretary of State for Scotland sitting on the Government Front Bench? Can he not give any reply?

Mr. Glenvil Hall

Will the implementation of any part of this scheme require legislation?

Mr. Macmillan

I am advised that none of it will require legislation at the present time.