NOT IN CONFLICT

Poverty Bay Herald, Volume LXIII, Issue 19126, 22 September 1936, Page 4

NOT IN CONFLICT

HOUSE LOAN POLICY STATE & CO-OPERATORS CONFORMING' TO PRINCIPLE “From all that has been published to date concerning the proposals of the Government in connection with housing loans, our society’s directors are satisfied that there will be no conflict between the State and the cooperative building societies in New Zealand. The principle adopted by the State is almost identical with that on which the societies have been working for many years, but the entry of the Government into our field does not mean that the building societies have to vacate it.” stated a leading member of the Gisborne Co-operative Building Society to-day discussing the effect of recent housing legislation on the business of the private co-operative organisations. “The fact that the 'Government’s scheme sets a minimum of 20 years for the liquidation of the loans to be made under the new legislation will have been noted by contributors to private building societies,” he continued. “The period of repayment with the private societies is 12 years, and though is takes longer now to bring the average loan to full liquidation, our contributors have the advantage of being able to complete their payments years before the minimum Government term would run out. RATES OF INTEREST

“So far as the rates of interest are concerned, it is doubtful whether the Government will be able to offer rates any more attractive than those of the privato societies. In the case of the Gisborne society, interest paid over a long period has averaged a little over 3 per cent. Moreover, there are not many restrictions imposed in the ease of the society, whereas front all appearances the Government scheme will have certain features which will not please everyone.” On the subject of the Government’s provision for insurance of the life ot the mortgagor, so that in the event of his untimely death the property would pass to his heirs free of encumbrance, it was pointed out that the building societies had made this provision optional for many years. The experience had been that borrowers were not keen to take up insurance in addition to the repayment and interest load, and in the case of the Gisborne society, not one loan had carried the optional insurance.