INTEREST-FREE PORTIONS OF HOUSE LOANS

Chronicle (Levin), 23 November 1946, Page 7

INTEREST-FREE PORTIONS OF HOUSE LOANS

A statement on tfif article which appeared in these4 coiqpms last Saturday under the headiug H'Uontroversy Rages Over Question of Interest-Free Portion of Housing Loans, ' ' has been made by thc chairmafi of thp- Palmerston North R.S.A. Rehabilitation Coniinittee, Mr. A. B. Loughnan. Comment from rosponsible bodies such as this are welcomed by " Servicemen's Forum, " especiaily when they deal with such subjects of national importauce as ro- ' habilitation. "Referring to the article which aj)peared in "The Times ' ' of last Saturday 's issue rcgarding the intorest-free portion of rehabilitation housing loans, I suggest that the wording is unfortunatc in stating that this association misunderstood the position," stated Mr. Loughnan. "On the contrary, the subject has been studied very closely over a period of at least six nionths in invcstigating numerous complaints. "As an iilustration of thc implications in the present fonuula, 1 rofer to a inaii who, after 13 years of service iu the navy, had saved the sum of £550. He had a house property brought to his notice by thc Rehabilitation JJcpartment which suited him exccllently as iL containcd the three bedrooms necessary for himself and his family, liaving two children of onuosite sexes.

"He purchased the property for £2050, received a loan from the Rehabilitation Hepartmcnt of £1500, and contributed thc balance in cash. Thc sale was conlirmed by the Land Saies Court without a rcduction in price. This mau will repay the £1500 and inLerost by payments exteuding over 30 years and amounting to £6 7s a month. If he had not been in tlie position to contribute towards his own house he would have beeu entitled to have received up to £300 of his loan interestfree and would have savod a mouthlv outgoiug of £1 5s 5d over a period o*t" 30 years. "Tlie official formula is always the same in deseribing the purpose of the interest-f ree loan as intended ' to bridgc the gap between normal values and prcsent-day costs'," Mr. Loughnan said. "We consider it both illogical and unfair that when thc gap is greater such a mau should be deprived of the privilege of his interest-free loan. "Our rehabilitation sub-committee waited upon Mr. Nash, Minister of Finance, on the oceasion of his recent address at Palmerston North with a view to obtaining an alteration in the formula desigued to bring eases such as the oue referred to withiu the "bonefits >• of the interest-free loan. We received a syuipatlietic hcaring from Mr. Nash, who noted the particulars of this and other cases, and promised to have the inattcr iuvestigated. "Mr. Nash's reply has not yet been received," eommentcd Mr. Loughnan.