At Solihull Urban District Council offices, this morning, a cheque for £173,751 was handed to Mr G H Budd, accountant to the Council, by Mr J P Hilton, general manager of Birmingham Municipal Bank.

 

A short time ago negotiations took place between the Council and the bank with a view to the latter taking over the mortgages which had been effected from time to time with the Council under the Small Dwellings Acquisition Act. The borrowers were under contract to pay interest at rates varying from 5 per cent to 5½ per cent, and in view of the general reduction in mortgage interest rates it was felt desirable to find an avenue whereby the borrowers could have the benefit of lower interest rates. Birmingham Municipal Bank having obtained Parliamentary powers to effect transfers of mortgages, it was eventually arranged that the transfers should take place by this means, and the borrowers would then have their interest charge reduced to 4½ per cent, which is the rate in force in the bank. Four hundred and fifty-three mortgages were involved, and the transfer has now been finally completed.

 

Explaining the transfer from the point of view of Solihull Council, Mr Budd said that the advances made by the Council under the provision of the Small Dwellings Acquisition Act for the purposes of house purchase had been a matter of some concern to the Council, particularly having regard to the reduction in the general rates of interest which had taken place over the last few years. The Council had obtained the money for these advances from the Public Works Loans Board, and they had been unable to obtain any concessions from this body on the rate of interest payable on these loans.

 

The rate at which the advances had been made to persons desiring to purchase their houses under the provisions of the Small Dwellings Acquisition Act was fixed by the Ministry of Health, and normally was at a quarter per cent in excess of the rate charged to the Council for the loans. As the Council had been unable to obtain a reduction in this rate of interest, they had naturally not been able to pass on any concession to the borrowers, and this transfer which had taken place with Birmingham Municipal Bank had been evolved primarily for the purpose of passing on some benefit to the mortgagors.

 

The vice-chairman of Solihull Council, Mr R J Turner, and the chairman of the Finance Committee, Mr Ambrose Hopper, had taken a very great interest in this matter, and had been particularly anxious that a scheme of this nature should be carried through and that the interests of the mortgagors should be fully safeguarded.

 

The Council felt satisfied that the treatment which would be extended by the bank to mortgagors who, through unemployment or other unfortunate circumstances, might at some future time find difficulty in meeting the instalments, would be on similar terms to the treatment which had been extended to them by Solihull Council.

 

Mr Budd, on behalf of the Council, expressed his appreciation of the assistance which had been afforded to him in the negotiations in connection with the transfer by Mr Hilton.

 

Others present were Mr G W Hill (representing Birmingham Town Clerk’s Department) and Mr C H Cook, Clerk to Solihull Council.

 

The expenses in connection with the transfer have been borne by the Birmingham Municipal Bank, without any cost to the borrowers.