Building Societies (Hansard, 25 February 1976)

§ 7. Mrs. Ann Taylor
asked the Secretary of State for the Environment when he last met representatives of the building societies.

§ Mr. Crosland
My Department maintains regular contacts with the Building Societies Association.

§ Mrs. Taylor
Will my right hon. Friend tell the House what discussions he has had with the building societies about the high level of funds which they hold? Is there any chance of a reduction in the mortgage rate of interest? If not, will he reconsider asking the building societies to make loans to local authorities so that the local authorities can lend on some of the older properties, since, without this extra help, there would not be enough money available from the local authorities themselves to lend to those who need to buy these older properties?

§ Mr. Crosland
There is a later Question about the mortgage interest rate. My hon. Friend asked about lending on older properties—down market generally. Now that the private and public sector house building figures are on a healthy trend and we have an extra £50 million for Section 105, this is my top priority. The building societies and the local authority associations have met to discuss the problem and have set up a joint working party of officials, instructing it to reach conclusions as soon as possible. I assure my hon. Friend that I shall follow the results of that initiative with the closest possible attention.

§ Mr. McCrindle
Is not the time approaching when the right hon. Gentleman should consider admitting that the building societies are either unwilling or unable to take over from local authorities as lenders on old property? Will not he consider speaking again to the Building Societies Association with a view to causing the societies to modify their lending terms, because it that is not done he will be accused of misleading thousands of people who want to buy just that type of property?

§ Mr. Crosland
We should bear in mind that the provision in the White Paper on Public Expenditure for local authority mortgage lending, which will in the main be directed to this kind of property, will be between £250 million and £350 million, which is a high figure by historical standards. I have sympathy with what the hon. Gentleman has said, but this matter is in play between the local authorities and the building societies, and until I see the outcome of that initiative I do not propose to take a further initiative myself. But this is my first priority.

§ Mr. Loyden
When my right hon. Friend next meets the building societies, will he raise with them the subject of making mortgages available in what apparently are now black areas—Liverpool 8, for example—where people are finding it very difficult, in fact almost impossible, to get mortgages?

§ Mr. Crosland
That is another question on the same general theme, but I should emphasise that local authority mortgage funds last year ran out after two or three months because it was thought that a quota might be imposed, as it was. But funds will become available again at the start of the next financial year, and by historical standards will be at a very reasonable level. Nevertheless, what my hon. Friend has mentioned is at the top of my list of housing priorities.