Cut in first-home loans hinted at by Mr Quigley

Press, 9 March 1982, Page 3

Cut in first-home loans hinted at by Mr Quigley

Parliamentary reporter The Housing Corporation may scale down its lending to people building their first home.

The Minister of Housing (Mr Quigley) hinted at the move/ in a speech to the Master. 1 Builders’ Federation conference in Blenheim yes-' terday morning.

Direct assistance from the Government might be replaced by a Government subsidy through the corporation on interest on borrowing from the private sector, said Mr Quigley. It would apply to people now eligible for a Housing Corporation first-home mortgage, and for about three years. The subsidy would be withdrawn in stages after that, until borrowers were paying interest rates perhaps comparable to- trustee savings bank rates. The option was one of several he was examining in a move to stop the steady drain of funds to “preferred” groups, such as public servants on transfer, or Post Office home ownership account holders, he said. The increasing percentage

of funds going to these groups was depriving the low-income group, which the Housing Corporation had been designed to help. In another bid to help the low-income sector, the corporation might relax its strict loan eligibility criteria, Mr Quigley said.

The “in or out”" criteria were unfair to people of limited means and savings ability. Instead the corporation would give greater consideration to each potential borrower, each case being judged on its merits. The interest subsidy would be designed to give new-home owners a start.

The planned review of the corporation’s rental policy would protect the present position of pensioners and welfare beneficiaries, Mr Quigley said.

The review would look at the fairness of allowing people with greatly improved means, to remain in a State house with an average rental of $25.90. At present tenancies were taken up for six years, and there was no review of the tenancy before that time.

Clearly those tenants who began to earn substantial incomes should be required to pay a current market rental while they looked for other accommodation, said Mr Quigley. Pensioners and welfare beneficiaries would nob lose their Stae house or be asked to pay an unfair rent for it. Instead they might be at an advantage if a house more appropriate to their needs became vacant.

“The people we will be looking at are those paying an artificially low rental who are in a position to fend for themselves without taxpayer support,” said Mr Quigley. Joint local authority-Hous-ing Corporation management of rental units belonging to both may become common. A pilot scheme with the Ashburton Borough Council was providing better use of pensioner units and State rental accommodation, he said.

The possibility of partitioning older occupied homes and then putting tenants in the unoccupied part could also be considered, he said. Local authority initiatives

would be helpful in this, because there were many advantages in encburaging an elderly person to remain in the home he or she had occupied for many years, Mr Quigley said. < Latest figures showed that people were able to get finance for. houses in the medium to higher' price range, because the growth in the number of these houses was “steady and .manageable,” he said. “This leaves the Housing Corporation free to concentrate on its traditional role of assisting the lower-income earner.”

The Minister of Housing’s intention to prune Housing Corporation lending further was another move to pull the corporation out of the mainstream lending, said Labour’s Shadow Minister of Housing (Mr M. K. Moore) yesterday, reports the Press Association. ■

“The Housing Corporation must be. in the mainstream of lending,” said Mr Moore. “Quite simply the Minister’s latest statement takes it even further away from that purpose.”