Bank Rate (Mortgage Interest Rates)

Oral Answers to Questions — Housing – in the House of Commons at 12:00 am on 25 March 1969.

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Photo of Mr Reginald Eyre Mr Reginald Eyre , Birmingham, Hall Green 12:00, 25 March 1969

asked the Minister of Housing and Local Government what will be the effect of the increase in the Bank Rate to 8 per cent. on mortgage interest rates.

Photo of Mr Graham Page Mr Graham Page , Crosby

asked the Minister of Housing and Local Government what effect he estimates the recent rise in Bank Rate will have upon rates of interest payable under building society and other institutional mortgages and local authority mortgages, respectively.

Photo of Mr James MacColl Mr James MacColl , Widnes

I have nothing to add to the full account given by my right hon. Friends in the debate on 19th March. With local authority mortgages, practice varies widely, but the general principle is that authorities must not make a loss on their lending.

Photo of Mr Reginald Eyre Mr Reginald Eyre , Birmingham, Hall Green

Is the hon. Gentleman aware that the increased cost of local authority and building society mortgages has had a disastrous effect upon the hopes of many young couples who wish to buy their own homes? Will he consider advising the Government to look at the position of Corporation Tax, Selective Employment Tax and other taxes which adversely affect the building societies, which have a special job of providing money?

Photo of Mr James MacColl Mr James MacColl , Widnes

The fact is that the number of mortgages being given has kept up extremely well last year and in some cases has been at a record level.

Photo of Mr Graham Page Mr Graham Page , Crosby

Will the hon. Gentleman persuade his right hon. Friend the Chancellor not to increase the composite tax on local authorities? Is he aware that if the composite tax of 6s. 5d. is increased by even 3d. after the Budget, that will nullify the increase in interest which the building societies have now had to make?

Photo of Mr James MacColl Mr James MacColl , Widnes

I am sure that my right hon. Friend will study what the hon. Gentleman has said.

Photo of Mr Albert Murray Mr Albert Murray , Gravesend

As a mortgage-payer, I should like to declare my interest in the interest. Would my hon. Friend take note of the remarks of the Chief Secretary to the Treasury, who said that the decision of the building societies had been rather hasty? Could he persuade his right hon. Friend to refer this to the Prices and Incomes Board?

Photo of Mr James MacColl Mr James MacColl , Widnes

That matter has been very fully debated.

Photo of Mr Frederic Harris Mr Frederic Harris , Croydon North West

Does the hon. Gentleman fully appreciate that a young couple have to be earning £2,000 a year to be able to raise a mortgage over 25 years at these new interest rates?

Photo of Mr James MacColl Mr James MacColl , Widnes

As I have said, the figures show that there is still a very good demand for mortgages for home ownership.