§ Mr. Wrigglesworthasked the Secretary of State for the Environment, in formulating his policy relating to the level of mortgage funds to be made available to home buyers what effect he estimates the supply of building society funds has upon the price and supply of houses.
§ Mr. ShoreThe demand for houses is strongly influenced by the supply of credit for their purchase. Over 80 per cent. of all house purchases are financed with the aid of mortgages, more than 90 per cent. of which are provided by building societies. A reduction in the level of building society lending therefore can be expected to affect directly the effective demand for houses, and consequently their prices.
§ Mr. Wrigglesworthasked the Secretary of State for the Environment what impact he estimates low-start mortgages will have upon the price of houses.
§ Mr. ShoreSome bodies which lend for house purchase—mainly local authorities—operate low start mortgage schemes. These schemes have had no significant effect on house prices.
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§ Mr. Wrigglesworthasked the Secretary of State for the Environment what estimates he has made of the effect of (a) the ending of tax relief on mortgages, and (b) only allowing tax relief at the standard rate, on the prices and demand for houses.
§ Mr. ShoreThere is no simple relationship between the level of tax relief on mortgage interest and the demand for and prices of houses. This question was discussed in the Consultative Document on Housing Policy (Command 6851) and its accompanying technical volume. However, one would expect any reduction of tax relief to have the effect of reducing the pressure of demand and therefore the pressure on prices.