HC Deb 10 November 1982 vol 31 cc544-5
19. Mr. Hill

asked the Secretary of State for the Environment whether, following the success of such a scheme in Southampton, he will seek the assistance of building societies for funding council house sales to reduce local authorities' mortgage lending to house buyers and to release funds for new building projects.

Sir George Young

I understand that the scheme under consideration would involve the re-financing of council mortgages by a leading building society, where the mortgagor consents. This can offer benefits for all concerned. A number of building societies have arranged or expressed interest in such schemes, and I have urged local authorities to consider them.

Mr. Hill

Does my hon. Friend agree that this is a gentler form of privatisation, which will result in a cheque in the council coffers of some £21 million? It also means a lower mortgage rate for the tenants and can do nothing but good. There will be a reduction in the number of staff needed to administer the council house scheme and there will be better administration of the houses by the building society concerned.

Sir George Young

My hon. Friend has succinctly identified many benefits that would result from the proposal. I hope that the local authorities will read his remarks and take note of them.

Mr. Allan Roberts

As the Minister has been discussing this issue with the building societies, can he let us know their attitude towards funding the purchase of part of a council house? How many building societies are interested in funding the purchase of council flats, a few of which are apparently being sold?

Sir George Young

I am certainly aware of building societies financing properties under shared ownership schemes, and that has been a great success. I am sure that building societies will consider mortgages on council flats if such a proposition is put to them.