HC Deb 13 November 1974 vol 881 cc393-5
11 Mr. McCrindle

asked the Secretary of State for the Environment if he will take steps to help first-time buyers of homes both with regard to deposit and interest rates on mortgages.

23. Mr. William Hamilton

asked the Secretary of State for the Environment what plans he has for helping young married couples to buy first houses.

Mr. Crosland

I am considering the question of mortgage facilities for house buyers as a critical part of the wider examination of housing finance.

Mr. McCrindle

To assist young potential house purchasers, and at the same time to give a stimulus to the building industry, will the right hon. Gentleman consider the proposal made by the Conservative Party during the General Election to the effect that assistance should be given to the individual who cannot raise the complete deposit? Does not the right hon. Gentleman realise that no matter how able building societies are to dispense funds for mortgages, unless and until a young couple buying a house for the first time can put down an adequate deposit all his efforts so far will be in vain?

Mr. Crosland

I do not know whether the hon. Gentleman is inviting me suddenly to pledge a 9½ per cent. mortgage rate.

Mrs. Knight

Good idea.

Mr. Crosland

That was the most outrageously dishonest election promise of the past 20 years, and a disgrace to the Conservative Party.

The hon. Gentleman raises a most important point. I know his personal interest in the matter. I am considering with the building societies and the builders a number of possibilities—whether special help for first-time buyers, the deferred payment mortgage scheme worked out between the building societies and the previous Government, or whatever else. These are all under the most intense and active consideration.

Mr. Hamilton

Is my right hon. Friend aware that one of the most important groups of people in the category we are considering is that of young teachers, particularly in urban areas? Will he consult the local authority associations to see whether they can take over empty new houses and allocate a proportion of them to young teachers who cannot obtain accommodation, especially in the big cities?

Mr. Crosland

I agree with my hon. Friend that the problem is acute in the big cities, although it is not confined to teachers, particularly in London. However, teachers form an important part of the problem. We have given local authorities wider powers to purchase empty houses and more money to do so. My hon. Friend's suggestion is worth pursuing.

Mr. Moate

Is the Secretary of State aware that in some areas, particularly in my constituency, the purchase of large numbers of private houses, many empty at present but many as yet unbuilt, will ensure that there are no private houses available for first-time buyers if the process continues at the present rate under the provisions of the right hon. Gentleman's Circular 74/70? Will the right hon. Gentleman consider the matter seriously because of the implications for house buyers of the future?

Mr. Crosland

I cannot agree with the hon. Gentleman's analysis. We are watching the situation very closely. The spectacle of some 40,000 completed houses lying empty month after month was intolerable at a time of acute housing shortage.

Mr. Robin F. Cook

Is my right hon. Friend aware that many first-time buyers depend on a loan from their local authority to complete the purchase, and that the current rate of interest charged to local authorities by the Public Works Loan Board is 14⅞ per cent? Does my right hon. Friend consider it just that those with the lowest incomes, buying the cheapest type of house, often have to pay the highest rate of interest because of that?

Mr. Crosland

I am well aware of what is an extremely intractable problem—the fact that a minority of local authorities. but an important minority, are charging on mortgages an interest rate higher than the building societies' 11 per cent., sometimes substantially higher. I am urgently considering the matter with my colleagues. I should like to find a solution. The difficulty is to find one that does not involve yet another Government subsidy. I should be reluctant to take on board such a subsidy, but if it is possible to find a non-subsidy solution I should like to do so.

Mr. Scott

On Monday the right hon. Gentleman is introducing a Bill which will considerably increase the subsidies that will go to municipal housing. Does he accept, as my right hon. and hon. Friends believe, that if there are extra resources to be found for housing they would be much better spent on increasing owner-occupation and enabling people to buy houses for the first time in particular?

Mr. Crosland

I welcome the hon. Member for Chelsea (Mr. Scott) to the Opposition Front Bench, although it is disappointing that he should make such conventional and ideological noises. The hon. Gentleman knows perfectly well, having served on the Committee considering the Finance Bill, that I would like to increase both council house building and building for owner-occupation. In terms of tax relief for owner-occupation the subsidy bill, contrary to what the hon. Gentleman suggests, has been increasing at an extremely rapid rate in recent years and is still doing so. I strongly object to picking up one or other of these forms of tenure as being in some sense preferable. The need is to build enough houses of all types so as to give people a proper choice.

Mr. Fernyhough

There are now 40,000 houses lying vacant. Will my right hon. Friend begin discussions with the builders and the private persons who may own them with a view to seeing whether he can sell them on the same basis as Conservative hon. Members would have sold council houses had they been returned to power last month?

Mr. Crosland

That is a most interesting suggestion.