July 3rd 1920 - Neville Chamberlain to J PHilton
Dear Mr Hilton
In conversation with Wing Commander Greig who is Controller of the Household to HRH the Duke of York, I told him something about the contribution the Bank is making to the housing problem.
Commander Greig was very interested and asked me if I would let him have some further details for the information of HRH who is himself keenly interested with work of this kind. I shall be much obliged if you will for this purpose forward to Commander Greig details of three different cases of houses and giving purchase prices, amount of advance, rate of interest, amount and number of annual instalments, how paid, ie whether monthly, quarterly etc. If you have the amounts payable I think this would also be of interest. if you can include in the above any cases of new houses on which a subsidy has been received from the Government this would be of interest and would show for what amount of cash down a man could become possessed of a house worth whatever the cost might be. Perhaps you would send me a duplicate for my information.
July 14th 1920 - J P Hilton to Neville Chamberlain
Dear Mr Chamberlain,
I enclose herewith a copy of my letter to Wing Commander Greig, together with the Examples referred to therein.
J P Hilton
July 14th 1920 - J P Hilton to Wing Commander Greig
I am requested by Mr Neville Chamberlain, MP to send you certain details of our Municipal Bank for the information of HRH the Duke of York.
The Bank has two departments, one being a Savings Bank and the other a House Purchase Department. It is in respect of the latter, I understand, that His Royal Highness would appreciate information.
I have pleasure in sending you herewith particulars of three typical cases in which advances have been made by the Bank.
Example No 1 is an ordinary house with three bedrooms. The house is leasehold, with 87 years unexpired, subject to a ground rent of £3.10/-d..
Example No 2 is a similar type of house, with the front room on the ground floor fitted up and used as a shop. This house also is leasehold, with 84 years unexpired, subject to a ground rent of £3.10/-d..
Example No 3 is a freehold bungalow, with accommodation similar to the other examples, in respect of which the original Government subsidy of £150 has been received.
The difference in the amount advanced by the Bank in examples 1 and 2 is explained by the locality in which the houses are situated, the extent of the ground, and the condition of the property.
I enclose a copy of the Rules of the Bank, on pages 17 to 20 of which you will find rules applicable to the Housing Department. Rule 68, fixing the rate of interest at 1d per pound per month on the balance outstanding, has recently been altered to 1¼d per pound per month. Rule 69 provides for the repayment of the advance by minimum monthly instalments of principal and interest. The amount of principal to be repaid each month is determined by the number of years for which the loan is granted. Thus, for a loan of £400 repayable in 20 years, the repayment would be £1.13.4d per calendar month. Interest at 1d per pound per month or 5%, would, in this particular case, be the same amount as the principal for the first month, but would be reduced each month as the balance outstanding was reduced. This method gives a decided advantage to the borrower over schemes where a fixed amount of principal and interest is arranged at the commencement of each year.
The Pass Book of the borrower is so designed that it always shows the balance outstanding, and the amount of principal and interest due the next month. In order to demonstrate the effect of repayment of principal and interest, I forward a statement based upon the second example referred to, which covers a five year loan.
The examination of Title is undertaken by the Town Clerk, who also prepares the Mortgage Deed, and completes the Mortgage.
The Committee of Management of the Bank are submitting a Report to the City Council on the seven months' working of the Bank; and as soon as I have a copy from the Printers, I will forward the same to you.
We feel that we are making a useful contribution to the solving of the housing problem locally by the facilities we offer. We are hopeful, too, that our efforts will result in getting the people to take a more personal interest in the houses they live in.
Birmingham is the only local authority which, up to the present, has set up such a Bank, but I am of the opinion, from the numerous enquiries which have been made, and the deputations which have visited the City, that similar Banks will be set up by the larger local authorities of the Country.
If there is any point not clear in this letter, or any further information which you may desire to have, I shall be only too pleased to comply with any request you may make.
J P Hilton