I propose to take Questions Nos. 29, 44 and 79 together.
I announced on 27 October, that the banks and building societies have agreed to provide up to £70 million in 1988 to meet some of the demands for house purchase loans from persons who would normally have recourse to a local authority. Where a lending agency makes a loan under these arrangements it will, of course, take a mortgage on the property in line with standard practice. The agencies involved will administer their own loans and there is no question of the payment of fees by them to the local authority. Under the arrangements made, the lending agencies will not apply prior deposit or savings requirements to loan applicants and have agreed to lend up to 90 per cent of the house value.
To ensure that there is a transfer of demand from local authorities to the banks and building societies, all applicants seeking a local authority loan after 28 October must apply in the first place to a building society and/or a bank and produce evidence of refusal of a suitable loan by both a society and a bank before the application can be considered by the local authority. Applications already approved by local authorities at that date will be processed and paid in the normal way. Others who had lodged applications with local authorities which had not been approved, will, in general, be required to approach a bank or building society; in this connection a reasonable approach will be adopted by local authorities, where an applicant who is eligible for a local authority loan has failed to obtain a loan suitable to his needs from a building society or a bank, his application for a loan will be considered in the normal way by the local authority.
I am aware that in these initial stages difficulties have been experienced by some persons seeking loans from individual branches of the lending agencies. Steps have been taken by the Department and the agencies to overcome these teething problems and I am satisfied that the new arrangements will work well once the transitional difficulties have been resolved.