MORTGAGE DEBTS

Timaru Herald, Volume CLVIII, Issue 23372, 1 December 1945, Page 9

MORTGAGE DEBTS

Decrease In War Years investment Found Difficult In the last lour years the value oi mortgages aisenargcu ui isew Zieaiaiiu nas exceeded tne value ui muibgages registered, anhougn iaiia ciansiers nave itacuea lecoru u&ures. a curreiib estimate oi mortgage indebceaness m tne Dominion is x,223,uju,00u, agamsi i24b,UOU,UUO in and £3s,uuu,uoj in 1900. The increased discharge oi mortgages was commented on oy the Public Trust Oilice in its annual report to Parliament. “The general trend appears to be for rurai mortgagors, as a result of the good seasons oeing experienced lor primary products to reduce or repay their mortgages,” the report said. -While the present prices lor primary products rule, this state of affairs is likely to continue.” The cilice further reported that no difficultv had been experienced in collecting interest and the amount of interest in arrears had been substantially reduced. Mortgage business since 1933 is shown in the following tables:

"The supply of funds available for investment on first mortgage exceeds the demand, and lending operations under this heading have been restricts,” reported the Public Trust Office in its annual report.’ Suitable securities for mortgages had been keenly sought after by all lending institutions. The State Advances Corporation, too. reports a gradual reduction in its mortgage assets by close on £7.000,000 from 1938, following the restriction of its lending activities by discontinuing the granting of loans for the sole purpose of enabling applicants to refinance existing mortgages held by private lenders or other lending institutions. “An upward trend in the mortgage assets has become evident this year for the first time since 1939, and it is safe to say that this trend will be accentuated over the years immediately ahead.” said the corporation’s report. “Indeed, the time may not be far distant when it will be necessary to raise additional loan moneys, either as part of a direct Government issue or as a separate issue by the corporation.” Mortgage assets held at March 31 last by the Public Trust Office were £10.286.965, and mortgage loans by the State Advances Corporation amounted to £43,893,547, 17,786 rural securities being valued at £21.931,793 and 36,326 urban securities at £21,961.754. Interest earnings on the common fund of £24,453,986 held by the Public Trust Office fell to such an extent that the rate of interest on investments in it was reduced by 3 per cent to 31 ■per cent, as from April 1 last, the cause being that considerable difficulty had been found “as a result of the buoyant financial conditions within the Dominion ... and in common with other financial institutions” in securing suitable Investments. Rehabilitation Loans However, the rate of 41 pei’ cent as interest on new business which has operated for some years has been maintained by the State Advances Corporation. The average rate of interest in 1943 was 4.72 per cent., more than 25 per cent of the mortgages being at 41 per cent and 25 per cent at 5 per cent. The average rate fell to 4.63 per cent in 1943-44 and to 4.51 per cent on mortgages registered in 1944-45. Loans to former servicemen under the rehabilitation scheme are granted at a lower interest rate (3 per cent) as a special Government concession. The rate does not mark a fall in rate levels, for the corporation now explains that “the difference between the concession rate and the corporation’s normal lending rate of 41 per cent is recovered from the Treasury.” The accounts show that for the year ended March 31, 1945, the War Expenses Account paid £34,589 as interest concessions on rehabilitation advances. Ths volume of land transfers was higher in the six years of war than in the previous six-yearly period Transactions were:—

Mortgages Registered Year ended Amount. March 31. Number. £ 1933 .. .. 13,257 8.939.925 1934 .. .. 12,192 7,652.993 1935 .. 14.775 11,695,641 1936 .. .. 18.679 17,057,223 1937 .. .. 21,875 19 419.451 1938 .. .. 23,761 18,872,789 1939 .. .. 24.847 20,334.847 1940 .. .. 22.694 17.680.455 1941 .. .. 21,639 16,468.230 1942 .. .. 20.690 14.977.423 1943 .. .. 17,083 12,149.481 1944 .. .. 19.943 15.645.827 1945 .. .. 21,218 18,106,486 Mortgages Discharged Year ended Amount. March 31. Number. £ 1933 .. .. 11,303 8,149.355 1934 .. .. 11.100 9.086.847 1935 .. .. 14.724 13.732,853 1936 .. .. 18,578 17,553,233 1937 .. .. 21,827 19.803.446 1938 .. 23,640 19.361,425 1939 .. .. 22,999 16,596.505 1940 .. .. 20.706 14.159,101 1941 .. ,. 22.900 15.934,084 1942 .. .. 22.578 15.093.170 1943 .. .. 23,712 16.698,003 1944 . . .. 27,162 20,030,313 1945 .. .. 27,416 21,013,533

Year ended Town and March 31. Suburban Country 1933 .. 10.659 4722 1934 .. 11.183 4577 1935 .. 13,487 5141 1936 .. 17,161 5883 1937 .. 18.712 6466 1938 .. 20,634 5635 1939 .. 23.402 5563 1940 .. 22.196 5861 1941 .. 22,723 6105 1942 .. 23.225 4982 1943 .. 22.893 4764 1944 .. 26,779 6922 1945 .. 26,377 6907