HC Deb 30 November 1992 vol 215 cc48-9W
150. Mr. Hanson

To ask the Chancellor of the Exchequer what steps he is taking to ensure that building societies are passing on interest rate reductions to their customers; and if he will make a statement.

Mr. Nelson

The setting of mortgage rates is a matter for the commercial judgment of individual mortgage lenders, taking into account a range of factors including their overall financial position and the interests of both depositors and borrowers.

At a recent meeting with the Council of Mortgage Lenders my right hon. Friend the Chancellor made it clear that he hoped that the recent cut in base rates would be reflected in lower mortgage rates as quickly as possible.

The building societies gave their assurance that reductions would be made as soon as possible consistent with the prudent management of the societies. The main societies have announced reductions in their basic mortgage rates to around 8.5 per cent.—their lowest level since the 1970s. The new rates already apply to new borrowers and will be implemented for most existing borrowers by 1 January 1993.