STATE HOUSES

Ashburton Guardian, Volume 70, Issue 108, 20 February 1950, Page 2

STATE HOUSES

PURCHASE BY TENANTS PRIME MINISTER’S STATEMENT (P.A.) WELLINGTON, Feb. 18. Increased limits for building and rural housing loans, provision for 1 State house tenants to buy their homes and the sale at valuation of new shop sites in State, housing areas were among . the provisions of the Government’s housing policy, announced by the Prime Minister Mr S. G. Holland) to-day.

The policy, he saic], was based on the principle of private home ownership as part of the Government’s programme for a property-owning democracy with a wider spread of individual ownership by the people. Mr Holland’s statement included the following:— The limits for building loans would be increased to £2OOO, inclusive of suspensory loans. Rural housing advances would be increased to £2OOO, and provision provision 'made for loans up to 90 per cent, for civilians and 100 per cent! for former servicemen.

State house tenants would -be permitted to buy their homes at valuation and on easy terms. No State house tenant would be disturbed in his occupancy, nor would the house he occupied be sold to anyone else. New shop sites in State housing areas would be sold at valuation.

No special legislation, Mr Holland said, was required to commence operating the scheme immediately. Homes bujlt within the next three years to approved plans and specifications, or new homes purchased for personal occupation by an owner or a farm worker and not exceeding £2OOO in value, exclusive of the cost of the section, would qualify for a 10 per cent. Government suspensory loan. After the house had been occupied for seven years, the loan would be cancelled, but no house on which a suspensory loan has been made could he sold within seven years without first offer of purchase being made to the Government.

Suspensory Loans

Mr Holland said that suspensory loans would operate for three years, from December 1, 1949, and would apply to houses for which a permit was issued on or after . that date. There would' be no means test, but a complete house costing more than £2OOO would not qualify for the suspensory loan. Special consideration would, however, be given to the needs of applicants with large families. Applications for suspensory loans coulcl be mace to the State Advances Corporation at any time after the plans and specifications had been prepared, the amount of the loan being 10 per cent, of the cost of the completed house, with a maximum of £2OO in all cases, Mr Holland said. It would be secured by a second mortgage with interest at 4 1-8 per cent., hut no interest would be payable so long as the conditions of the loan were observed.

The essential points in the programme to increase facilities for private home builders were given by Mr Holland as: Stimulation of building generally, as set out in the election policy, a matter which was receiving the attention of a special Cabinet committee. Easing the housing shortage by releasing controls for new tenancies under the Tenancy Act. Mr Holland said the new' policy was in many respects a complete change from the policy of the previous Government. Administrative problems involved for the various departments concerned would therefore be considerable and would require a little tune to straighten out. There would also be a great deal of extra work and many inquiries to attend to. In the circumstances the public must be prepared to allow for some initial delay in the immediate operation of the various schemes, but that delay would be reduced to a minimum.

Conditions For Loans

The maximum term of the loans would be 35 years, jand in determining the amount of the advance the State Advances Corporation would take into consideration the ability of the borrower to meet his commitments, Mr Holland said. If the owner obtained the finance to build his home from other sources than the State Advances Corporation or the Maori Affairs Department, any suspensory loan applied for would be arranged through whichever of the above departments applied in the particular cases. With regard to rehabilitation loans, the present supplementary loans scheme would continue for eligible former servicemen to the extent authorised in each case by the Rehabilitation Board. All future and existing supplementary loans would remain as loans on the conditions on which they were now granted. Suspensory loans would be cancelled after an owner had occupied the house for seven years, continued Mr Holland, but where the owner, before the seven years expired, ceased to live permanently in the house or sold it, the loan would become due and payable and would carry interest, until repaid. After seven years’ occupation the owner could dispose of the house as he wished, but before that time, he must first offer to the Crown if he wished to dispose of it. The general effect of the policy, said Mr Holland, would be greatly to stimulate private building.

Separate Valuation of Houses Although the Housing Act, 1919, contained authority for the sale of State houses, it would be nefcessary to amend the act in the coming session to make more adequate provision for sales, Mr Holland said. Although rentals had been fixed uniformly for each type of State house, irrespective of locality, quality or value, it would not be possible to state a fixed selling price for each type of house. Types of construction, quality of Avorkmanship, and materials used varied considerably, but consequently each house must be valued separately to fix the sale price. “Houses will be sold for cash, but finance up to 90 per cent, will be provided for civilians and up to 100 per cent, for former servicemen,” said Mr Holland. “The maximum term will be for 40 years at 4 1-8 per cent, interest for civilians, and 3 per cent, for eligible former servicemen. Because

double unit flats and shops would require special attention, the sale of single units only would be .undertaken at present. In view of the fact that the allocation of new State houses was based on hardship and urgency of housing needs, the Government proposed that the opportunity to rent should be continued.

Sale of Shop Sites

New shop sites in State housing areas are to be. sold at valuation, Mr Holland said. The Government did not intend to build shops for letting, but .the sites were to be sold at valuation to individual traders who had the capital and experience to establish themselves. Subject to a few possible commitments arising from offers by the previous Government to co-oper-ative societies, preference would be given to former servicemen. A condition of sale Avill be that an adequate shop Avas built on the site Avithin a fixed time. The shop must also be used for carrying on a specified trade and should the shop be sold Avithin seven years it must be first offered to the Crown.

“The Government policy is also in line with the widely signed petition to Parliament last year, praying that State house tenants should enjoy the benefits of private enterprise competition,” Mr Holland said. “The provision of shops has generally lagged behind the building of houses in State housing areas and the Government’s decision to sell shop sites to individual traders should do much to ease the position and should ultimately give residents of those areas the full shopping facilities they need.”