PRIVATE HOUSE BUILDING

New Zealand Herald, Volume LXXIV, Issue 22823, 2 September 1937, Page 10

PRIVATE HOUSE BUILDING

To reduce the present slackness in the private building of small houses, Mr. W. Appletou, chairman of the Wellington Investment, Trustee and Agency Company, has suggested that the Government co-operate with building societies in financing the man wishing to build a home of his own. The societies would take a first mortgage and the Government advance the balance required on a table second mortgage. Whether such a scheme would be acceptable to the Government is extremely doubtful. Private enterprise would obtain a sound outlet for loans, leaving the State (and ultimately the taxpayer) to accept most of the risk. In any case the Minister of Finance as head of the State Advances Corporation would not easily be persuaded of the necessity for such a partnership. The corporation is ready to do the same sort of mortgage business as Mr. Appleton wishes to promote. It is willing to lend up to two-thirds of the value of the security at 4| per cent interest. The corporation will also grant loans in excess of that margin if it is satisfied concerning what Mr. Nash describes as "two essential factors" —the stability of employment of the applicant and the sufficiency of his income to meet living expenses; instalments, upkeep and other outgoings on the property. The prospective home owner is not to be allowed, in the financial sense, to bite off more than he can chew. Second mortgages on corporation houseß are discouraged and cannot be contracted unless the corporation consents in writing. It is not likely that Mr. Nash would compromise so prudent a policy by adopting Mr. Appleton's scheme. Any creditworthy borrowers seem assured of accommodation by the corporation or the building societies. Why are such borrowers not forthcoming when houses are so scarce 1 Some of them may be waiting for the ballot of State houses. The others of an acceptable type, thrifty enough to be able to make a fair deposit, are probably also thrifty enough to hold back from building at present high prices. The Government's high wages policy is reflected in high building costs and a slackening in the industry on private accounts