asked the Minister for Local Government if he will approach the building societies to reduce the rates of interest being charged to borrowers for house purchase.
200.
Ceisteanna—Questions. Oral Answers (Resumed). - Building Society Loans.
199.
asked the Minister for Local Government why the building societies were allowed without giving any advance warning to close down on loans to all except investors in the building societies.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 199 and 200 together.
The interest rates charged to borrowers by building societies reflect the rates which the societies pay on moneys invested with them and, as I have indicated previously, are a matter for determination by the societies in the light of practice and the need to attract funds for housing. I understand that most societies have been obliged to restrict lending for the present to persons who have funds invested with them because the demand exceeds the amount being deposited. Any such restriction is a matter for decision by the societies in the light of their commitments and other relevant factors and not one in which it would be appropriate for me to intervene.
I might point out in this connection that the societies' commitments in respect of house-purchase loans are at a very high level, and applications with them for loans amounted to £21,862,000 at 30th September, 1971, compared with £12,783,000 and £7,448,000 at the corresponding dates in 1970 and 1969 respectively. In these circumstances, any failure by the societies to attract and retain funds would have serious consequences both for prospective house-purchasers and for the building industry generally.