Fewer loans for houses

Press, Volume CXVI, Issue 34047, 10 January 1976, Page 14

Fewer loans for houses

HVew Zealand Press Association)

HAMILTON, January 9. The Housing Corporation, which suspended all loan applications last month, is understood to have also slashed its loan-approval rate by at least 30 per cent.

Government sources said today that prospective home seekers would face waits of up to five months for finance, and tipped that the present squeeze on loan funds would be extended into the new financial year. The Minister of Housing (Mr Gair) suspended all applications from December 24 (until January 31, ostensibly .to clear a record backlog of 13700 applications. But Govlernment sources said the big (slow-down in approvals had , also been made for urgent (budgetary reasons. Even with the suspension the corporation is expected to exceed its budget by §3om for the 1975-76 financial year. Partv promise Mr Gair has already indicated that a review of the present loan policies and criteria would be made shortly, and this is almost certain to lead to tougher loan restrictions. The National Party has promised to place more emphasis on private-housing borrowing and end the corporation’s dominance in the field.

“The number of approvals getting through now is down by about half on only three months ago,” one Government source said. “The financial situation within the corporation was much worse late last year than the prev-

ious Government was conceding.” He said that the corporation had budgeted to allow 11,500 loans in the current financial year, and that without the suspension on applications, the figure would have reached more than 15.000. The Government has pointed out, however, that even if more money was available at present, the number of applications would have clogged the administrative machinery, extending the processing time to up to five months.