STATE LENDING POLICY

Southland Times, Issue 25483, 2 October 1944, Page 3

STATE LENDING POLICY

MONEY FOR FARMS AND HOUSES

The activities of the State Advances Corporation for the year ended March 31 last are reviewed in the annual report of the corporation. The report states that the board has contiued the policy adopted in the earlier years of the war of giving preference to applications for loans required for the purchase of farms and the purchase or erection of houses, and special facilities have been provided for those applicants who require assistance in the erection of houses for themselves.

“The basis of lending adopted by the corporation is almost exclusively on the amortization system, which provides for the repayment of loans over various periods, and by this method the borrowers on the one hand gradually increase their equity in their properties, and on the other hand the capital funds thus repaid are made available for the purpose of making advances to new applicants,” says the report. “The favourable results obtained by the corporation under this system during recent years indicate the preference by the public for this type of borrowing, and the stable conditions that have existed in regard to the general income circumstances of members of the community are reflected in the comparatively small proportion of borrowers who have failed to meet their mortgage instalments in full.” GRANTS TO SOLDIERS The report states that the grants made in the last financial year by the Soldiers’ Financial Assistance Board totalled 3427, representing a disbursement of £197,779. During the four years since the board has been established there have been 21,494 grants totalling £740,157. These payments by the board are provided from the War Expenses Account. The section pf the report dealing with the housing account states that the number of new houses and flats taken over since the inception of the State housing scheme up to March 31, 1944, was 15,388, and there were 31,816 applications unsatisfied at that date. Since the first houses were tenanted in 1937 the total rents for all new properties in the scheme up to the end of last March had amounted to £3,845,340, and of this sum only £2014 had been written off. The arrears of rent on new housing units under administration at the close of the year amounted to £4567. REVENUE FROM HOUSES The revenue account for new rental houses disclosed an excess of revenue over expenditure of £8873, compared with £6256 for 1942-43. On the expenditure side there was a charge of £41,173 for war damage insurance, which item would be considerably reduced in subsequent years following the reduction in the premium which became effective on March 1 last. Depreciation, maintenance, and vacancies had been assessed on a basis considered to be sufficient to meet the average accruing charges. The book value of new houses after allowing for depreciation was shown at £19,969,923.