"Land Speculators Will Be Encouraged”

Press, Volume C, Issue 29503, 3 May 1961, Page 21

"Land Speculators Will Be Encouraged”

(Kew Zealand Press Association)

WELLINGTON. May 2. It appeared that land speculators would be encouraged at the expense of genuine builder-subdividers. said the former Minister of Housing in the Labour Government. Mr W. A. Fox today, commenting on the announcement on revision of State Advances Coorporation policy on sections under insurance leasehold schemes. Mr Fox said: “The Otara scheme was designed to accelerate the development of low-cost sections, in conformity with the Labour Government’s policy, bymaking Crown land available to proven builder-subdividers on the basis of 50 per cent, of such sections, when developed, being retained by the Crown for building purposes. and 50 per cent, remaining with the builders, to be sold at prices to be determined by agreement in accordance with development costs, plus a reasonable profit. ■‘Builder-subdividers whose sections conformed to State Advances Cornoration requirements. with a maximum price of £750. came within the insurance leasehold scheme.” said Mr Fox. “It is essential to keep costs down if prospective home owners on low and moderate in-

comes, who can find only a small deposit, are to 'be housed.

“The repayment of a large housing loan, plus a loan on the section at the insurance companies’ rate of 61 per cent., usually over a period of 15 years, will become too onerous, and inevitably will result in some persons being unable to meet their commitments.

‘The only ones to benefit under this change of policy are land speculators and the insurance companies, who at present enjov a gilt-edged security at 61 per cent interest.” said Mr Fox. “The builder-subdividers will be forced to pay more for ‘raw’ land, more farm land will be bought for speculation on future building sections, and the purchaser. who now is faced with added costs when buying an insurance leasehold section, will find his costs increased by rising prices. “The best way to prevent land speculation, and to reduce costs to the home purchaser. is for the Government and local authorities to increase land development, and make sections available at reasonab’e prices and low rates of interest, in cooperation with builder land subdividers.” said Mr Fox.