§ Mr. John Ellisasked the Secretary of State for the Environment what arrangements he has made with the building societies to help to maintain the level of local authority lending for house purchase during 1977–78.
§ Mr. ShoreFollowing the reduction in the Government's provision for local authority lending for house purchase in 1977–78, I have now agreed arrangements with the building societies aimed at maintaining lending through local authorities at the level originally envisaged before the cuts. Under these arrangements English local authorities will receive mortgage allocations totalling £273 million for 1977–78. Of this sum the building societies expect to be able to provide £157 million. Separate arrangements are being made for Scotland and for Wales.
The new arrangements will cover both direct lending by local authorities and lending by building societies to applicants referred to them by authorities. The allocation for each authority will continue to reflect the needs of the area, with particular emphasis on lending in respect of older properties. Loans will be restricted to applicants who come from within the existing defined priority categories and who are unable to obtain building society mortgages by normal means. Details will be notified to local authorities in the course of the next few days.
I welcome the co-operation of the building societies and the authorities which has made these arrangements possible, and I look forward to the development of close working relationships between them at local level. In particular I hope that the development of the building societies' commercial guarantee scheme will be of help to those who cannot afford large deposits, and that these arrangements will also help to 598W resolve the difficulties which arise out of so-called "red-lining".