HC Deb 26 February 1975 vol 887 cc486-7
18. Mr. Watkinson

asked the Secretary of State for the Environment if he now has any plans to control the flow of funds available for disposal by the building societies.

Mr. Crosland

As I made clear in the House on 27th January—[Vol. 885, c. 43–4]—the Government are committed to the principle of stabilisation of mortgage finance. We maintain close and continuing consultation with the Building Societies' Association about the measures which may be necessary from time to time.

Mr. Watkinson

I thank my right hon. Friend for that reply. Does he agree that deposits coming into the building societies are increasing rapidly? If and when the house market begins to move shall we not face the serious danger of a repetition of the spiralling house prices which we experienced in the early 1970s? Therefore, is it not necessary to set up a stabilisation fund in the immediate future?

Mr. Crosland

Yes, Sir, there is a danger that a combination of greatly increased mortgage commitments, combined with the present failure to increase the number of starts in the house building sector, could lead to a wholly undesirable house price explosion. This is at the forefront of my mind in discussing the question of stabilisation. However, it does not involve any question of a stabilisation fund because, in effect, the Government are now acting as a stabilisation fund. I take my hon. Friend's point.

Mr. Adley

Will the right hon. Gentleman now consider taking the step advocated by the Conservative Party at the last election—namely reducing the level of mortgage interest for first-time home buyers so that we can begin to get people into houses rather than leave them empty?

Mr. Crosland

The hon. Gentleman may not have noticed my recent statement that we have introduced, with the agreement of the building societies a low-start mortgage scheme.