HOMS FOR £50

Evening Star, Issue 19606, 12 July 1927, Page 2

HOMS FOR £SO

THE BUGBEAR OF INTEREST- “ Any man with £SO, who can afford to pay a 'reasonable amount every week, need not -pay rent any longer,’' said a, well-known local builder in discussing the housing situation. He added that the housing problem did not ready exist for those with this small amount of ready capital. Ho cited a case where a man secured,a natty tittle bungalow in one of tho most popular suburbs )y putting down -.'60, and stated that the purchaser had secured a fust mortgage for £6OO at 6 ]cr cent, and a second mortgage for the balance at & per cent. Other instances were quoted where builders had started building operations on the preliminary payment of the deposit, and received the balance at monthly intervals from the mortgagees. Assnmjng that the lions vs v.oro priced at £BSO the interest on Ino two mortgages would amount to £52 a year, and there would bo an ad.ir.ional £i(> for rates and £2 for ms nance, though, of course, there would no a steady decrease in the interest bill provided an effort was made to reduce the principal by an appreciable sum every year. But it is tho interest chrrges limb so often deter the man witn a limited .amount of ready cash from acquiring his own home. The Government, through the advances to voikus’ scheme, that was outlined in these columns last week, <ml the various building societies, help to reduce this burden to some extent, and nianv hen dreds.havo been financed into homes, particularly through the agamy of the latter. But after all, even building societies are not philanthropic institutions, and something more might bo done to assist those who are not in a position to pay more than £1 per week. To a limited extent, this has been done through the Huit housing scheme, and a good deal has been achieved in England by public bodies, but Dunedin is hopelessly in the rear. The Dunedin City Council’s effort to solve the problem has been almost negligible the erection of a few £l,lOO bungalows that were disposed of on terms that made it impossible for the very class who most wanted them to even consider them. And now it is rumored that the council’s three remaining houses are under offer to one man. The corporation has evidently retired from the field—beaten.

Amongst - the many suggestions put forward recently was the proposal by Mr L. Deans Ritchie, the president of the Real Estate Institute of Otago. Speaking at the recent annual meeting of that body, Mr Ritchio dealt at length with the housing problem, and in the course of his remarks affirmed that the city was quite able to finance a scheme of its own without leaning on the Government. He was particularly anxious to help those least able to finance the purchase of a. property. In the ordinary way, lie said, tho purchase of a home presupposed the ability to pay a comparatively substantial sum as a deposit, but there were many deserving people who, while they had been unable, owing to the expense of rearing a. family or other causes, to save from a comparatively small income a sufficient deposit for a home, could pay a suitable weekly payment .to cover principal and interest. Such 'payments would gradually repay the loan from tho Housing Committee and would provide a continuous fund with which to finance others who desired to secure a home of their own. Part of the money for each home, would bo raised on first mortgage in the ordinary way, and in some cases something might be forthcoming from the purchaser, and all the Housing Committee would need to find would be a fund to finance the balances in the form of second mortgages. Such organisations as tho Housing Committee, Chamber of Commerce, Trades and Labor Council, Employers aud Manufacturers’ Associations, etc., could surely accomplish stiph a task. In the event of the sale of one of the properties so financed the second mortgage would be repayable unless in the opinion of the Housing Committee the circumstances of the purchaser gave him the right to take over the existing mortgage. If proper discretion were used both in the selection of purchasers and as to the typo of house, not only did he think there would be no loss on the fund, but that some return in the shape of interest would be forthcoming, while tho greatest dividend of all would lie in the fact that the scheme was calculated to make better and happier citi-" zons of all concerned.