HC Deb 26 February 1975 vol 887 cc487-8
20. Mr. MacGregor

asked the Secretary of State for the Environment whether he is now in a position to make a statement on the Government's policy towards assistance to those with local mortgages whose interest rates are currently in excess of the Building Societies Association's recommended rates, following his general review of housing finance.

Mr. Kaufman

While the longer-term issues will be considered in the review of housing finance, I am now studying whether anything can be done in the short term about the difficult problem of local authorities charging high mortgage interest rates.

Mr. MacGregor

Is the hon. Gentleman aware that in correspondence with his right hon. Friend the Secretary of State for the Environment I was promised a full reply at the end of November? Will he recognise that many people with variable mortgages with local authorities are paying over 11 per cent. and that, as recognised in the scheme, they are often people with lower than average incomes? Does he appreciate that some of these people face real difficulties in meeting their commitments, which grow greater from month to month, and feel that they are being treated unfairly compared with people repaying mortgages to building societies? Will he treat the matter as one of urgency and introduce an interim solution very shortly indeed?

Mr. Kaufman

I am sorry that the hon. Gentleman has not had a reply to his letter. I have a draft copy in my brief and I hope that he will get the reply quickly. I agree with him that this is an urgent matter, and we are trying to find a way to deal with it.

Mr. McNamara

Since there is a shortage of new houses on which building societies can make advances within the average income of working people, will my hon. Friend look into the situation whereby building societies are loth to advance money on older houses and are thus forcing people to go to local authorities whose interest rates are higher?

Mr. Kaufman

That may be so. The situation varies. Most local authorities are still bringing down mortgage rates. Only a very small minority are affected, but admittedly this is a serious problem.