PURCHASE TERMS OF STATE HOUSES TOO GENEROUS?

Greymouth Evening Star, 3 October 1950, Page 3

PURCHASE TERMS OF STATE HOUSES TOO GENEROUS?

WELLINGTON, This Day (0.C.). —State tenants were being offered an unnecessarily high inducement to buy their houses, said Mr W. E. Lavelle at a meeting of the Wellington Chamber of Commerce. While he endorsed the Government’s policy of allowing State tenants to purchase their houses (says the Chamber), Mr Lavelle said the terms offered by the Government represented an opportunity to such tenants to add greatly to the material advantages they had already enjoyed at the expense of the rest of the community. “Assuming a typical case of a sale of a State house at £2OOO, the measure of advantages to the purchaser can be assessed approximately as follows: Amount of suspensory loan (which will be written off entirely under certain conditions in seven years), £200; probable average undervaluation, £5O; 5 per cent, discount for cash, assuming that a reasonable deposit and some advance payments can be made over the period involved, totalling, say, £lOOO, £5O; preferential interest rate on unpaid balance at 1| per cent (3 per cent, is payable as against 4| per cent.) on, say, £l5OO for half mortgage period, say, 15 years, £255; total cash gift to the purchaser £555. “By comparison with all other sections of the community who have not been sufficiently fortunate to get a State house over the past 14 years, a considerable moral injustice will take place,” said Mr Lavelle. “This moral injustice originated with the policy of making available State houses on artificially favourable terms, linked with financial conjuring and stabilised rentals regardless of constantly rising costs. Throughout the period of State house tenancies the fortunate few have gained great benefits at the expense of the rest of the community.”