HC Deb 04 February 1976 vol 904 cc1186-8
12. Mr. Hooley

asked the Secretary of State for the Environment if he will make a statement on the progress of his consultations with building societies about increasing their lending on older properties.

Mr. Crosland

I would refer my hon. Friend to the answer given to my hon. Friend the Member for Salford, East (Mr. Allaun) and to the hon. Member for Brentwood and Ongar (Mr. McCrindle) on 14th January 1976.—[Vol. 903, c. 372–5.]

Mr. Hooley

But is my right hon. Friend aware that in Sheffield there is some evidence that building societies are drawing arbitrary lines below which they will not lend on certain properties, for example, properties which they regard as being in unsuitable areas? Will he remind the building societies that they have not only a commercial responsibility but some social responsibilities?

Mr. Crosland

I am well aware that the difficulty to which my hon. Friend has referred exists. I am glad to say that the Building Societies Association and the local authority associations had a constructive discussion on 30th January about problems such as that to which my hon. Friend has referred. The meeting agreed to set up a joint working party of officers soon to advise on cuts in local authority lending, the problem of older properties and all the questions to which my hon. Friend has alluded.

Mr. Michael Morris

Is the Secretary of State aware that the scheme by which £100 million was set aside by the building societies for local authorities is not working? Therefore, will he authorise local authorities to underwrite the mortgage cases that they send forward to the building societies?

Mr. Crosland

The £100 million scheme, as the House knows, has met with a number of initial difficulties. It is quite incorrect to say that it is not working now. It is working much better than it was three months ago, but, because there are still residual difficulties about the scheme, the building societies and local authorities have agreed to set up a joint working party to attempt to iron out these problems.

Mr. Dykes

Does the right hon. Gentleman expect in the near future to meet the Building Societies Association and individual societies to discuss a reduction in their mortgage rates in view of the recent fall in interest rates?

Mr. Crosland

No, I have no immediate plans to meet them on that subject. We are, of course, constantly in consultation with the building societies about all aspects of the housing market.

Mr. Edwin Wainwright

Will my right hon. Friend bring his influence to bear upon the building societies to make them realise that those who are purchasing older properties are often young people starting off their married lives? Does he not consider that we should help them instead of driving them to finance companies, which have their poachers in all areas and which charge these young people tremendous rates of interest on the money they borrow to purchase property?

Mr. Crosland

These are the people whom we want to help most. However, there is more of an overlap between local authorities and building society mortgage lending than most people probably suppose. I am anxious to maintain local authority lending at a level such as will be able to cope with the cases to which my hon. Friend has referred while leaving the building societies primarily to take over cases where in the past there has been a complete overlap between the two types of lending.