Housing Societies (Borrowing Requirements)

HC Deb 17 March 1970 vol 798 cc180-1

11. Mr. Hunt

asked the Chancellor of the Exchequer whether he will take steps to allow housing societies and housing associations to have access to the Public Works Loan Board for their borrowing requirements.

Mr. Taverne

The Public Works Loan Board is empowered to lend to housing societies and housing associations, subject to certain conditions; but it does not normally do so, since these bodies can generally borrow from local authorities or from the Housing Corporation, whose lending powers are more flexible and who have greater knowledge of local housing conditions.

Mr. Hunt

Is it not a question of the rate of interest charged? Is the hon. and learned Gentleman aware that in a recent housing society development in my constituency borrowings of £90,000 will mean repayment of £355,000? Is it not grossly unfair that non-profit-making housing societies of this kind, aiming to provide good homes at reasonable rentals, should be subject to this quite intolerable burden?

Mr. Taverne

There are two questions. The first is whether one would get a more favourable rate of interest from the Public Works Loan Board. In recent months the rate has been above the rates obtained from the Housing Corporation. Secondly, the Housing Corporation is better fitted to deal with this kind of question because it often involves a close examination of the rentals that can be obained and an estimate of the cost of the housing. The Housing Corporation is in a better position to carry this out.

Mr. John Fraser

Is my hon. and learned Friend aware that he has been misinformed about this? Housing associations cannot get finance from local authorities for building new houses and they cannot get it from the Housing Corporation because it depends on the building societies putting in two-thirds. Would it not be better to depend on the short-fall in local authority building and give it to the Housing Corporation to finance all its work from Government money?

Mr. Taverne

I will study the suggestion that I have been misinformed and I will bear in mind the points my hon. Friend has made.