§ Mr. Orbachasked the Secretary of State for the Environment if he will make a statement on mortgage lending in 1979.
§ Mr. Shore:The Government and the Building Societies Association (BSA) are committed to supporting an active and stable private housing market. In view of the concern early in 1978 about an undue acceleration in the rate of increase in house prices, the building societies agreed to moderate the level of their lending from last April. For the past six months, the societies have been operating on a lending level averaging not more than £640 million a month. Nevertheless, the number of commitments made by societies has remained at a high level. In 1978 the societies are likely to promise about as many home loans as in 1977, which was an all-time record for a single year.
There are some signs that the rate of increase in prices has begun to slow down. In present circumstances, the Government and BSA have now agreed that a figure of £2,100 million is the appropriate level of lending during the first quarter of 1979.
811WThis should encourage the building industry to look ahead with some confidence.
The Government and the BSA will continue to monitor the housing market through the joint advisory committee machinery. The volume of lending in the second quarter will be discussed early in 1979.