HOUSING LOANS

Press, Volume LXXXI, Issue 24567, 16 May 1945, Page 5

HOUSING LOANS

PRESENT LIMIT TO BE RETAINED REHABILITATION BOARD’S DECISION (P.A.) WELLINGTON, May 15. Pending further investigation it has been decided by the Rehabilitation Board to ' maintain the present loan limit of £ISOO in advances to former servicemen to purchase existing houses or build new homes. , This -decision was made after consideration of a report by the board’s loans conlmittee, and in view of suggestions that have been made from time to time that an increase in the limit amount be made. As an alternative to increasing the amount of finance that can be ad-, vanced, the board is making investigations into the general question of building materials, designs, and costs in an endeavour to provide houses suitable for former servicemen at a figure that will come within the present loan limits. The board considered that this is at present possible in many parts of New Zealand. After considering the position, th 6 board’s loans committee is of opinion that the present loan limit would enable the great majority of applicants to build a home to meet their needs. The difficulty to-day was not so much one of finance, but labour and materials, and it felt that any increase of the loan limit would tend to have the effect of raising costs even above the present high levels. It was further considered by the board that even with the new low interest rates any additional commitments that would follotv an increase of the loan limit would.be too heavy for the average family man to maintain. At present a former serviceman’s annual repayment rate on a loap of £ISOO on a 30 years’ table mortgage' was more than £76. To this must be added approximately £26 a year for rates, insurance, and maintenance, making a total weekly charge of just under £2 a week. This was regarded as a high proportion of the wages of those in the lower income groups. For former servicemen who could not see their way clear to keep up such payments, the board thought the State housing scheme provided the solution, and the more State houses and flats that became available to former servicemen and women under the 50 per cent, allocation system, the more quickly would this solution be reached. The board also decided not to change its policy regarding supplementary loans. These cover the difference between normal lending values and present day values, and are granted provided the total sum does not exceed £ISOO. '