HC Deb 16 April 1973 vol 855 cc19-21W
Mr. Alan Williams

asked the Secretary of State for the Environment by how much the total of mortgage repayments over the life of the mortgage increases when the interest rate is raised by 1 per cent. and the householder chooses to extend the repayment period rather than make higher monthly payments in cases where the mortgage was originally (a) of £4,000 repayable over 25 years with 10 years still outstanding, and (b) of the same amount and duration, but with 20 years outstanding.

Mr. Channon

Exact figures would depend upon the particular circumstances of the individual mortgage. Theoretical figures would be misleading because they would not be typical. Many mortgagors would not keep a mortgage for as long as 5–15 years without making changes in the repayments particularly when lending rates are altered.

Mr. William Price

asked the Secretary of State for the Environment how many letters he has received about the increase in mortgage rates; and what reply he has sent.

Mr. Channon

Correspondents are being referred to the measures set out in the White Paper "Widening the Choice: The Next Steps in Housing" (Cmnd. 5280), which include the bridging grant to building societies to moderate the increase in mortgage lending rates over a three-month period. These measures will help ensure an adequate flow of mortgage funds and an adequate supply of housebuilding land.

Mr. Skeet

asked the Secretary of State for the Environment what is the total value of mortgage business transacted for private houses by building societies, local authorities and insurance companies treated separately and the percentages of the market supplied by each.

Mr. Channon

The following amounts were advanced for house purchase in the United Kingdom in 1972:

Building societies £3,614 million
Local authorities £198 million
Insurance companies £149 million

The total amounts advanced by other sources such as banks are not available so that exact percentage shares of the total market by the institutions listed above cannot be given.

Mr. Sheldon

asked the Secretary of State for the Environment if he will list the savings in expenditure intended to offset the £15 million grant to building societies.

Mr. Ridley

asked the Secretary of State for the Environment if he will specify the saving of £15 million he intends to make in the expenditure of his Department in order to pay for the cost of the mortgage subsidy scheme.

Mr. Rippon

The Government conduct every summer a review of expenditure leading to the publication of the White Paper on Public Expenditure in the autumn. The reductions are being made during this review and total figures will be published in that White Paper.

Mr. William Edwards

asked the Secretary of State for the Environment how many applicants for mortgages in the current financial year were earning less than the average national industrial wage; how many of these were industrial workers; how many were first time borrowers; and how many were contributing more than 10 per cent. of the total cost of the houses from other sources.

Mr. Channon

The latest available figures apply to the United Kingdom for the calendar year 1972. In that year the number of building society borrowers with incomes less than the average earnings of manual workers is estimated to have been about 192,000; of those about 126,000 were first-time purchases. Information is not available on the number of industrial workers, or on the number contributing more than 10 per cent. of the price of the houses from sources other than building society advances.