House Purchase Department:


The Bank's involvement in making advances for:

Smallholdings; Allotments; and Small Dwellings

House Purchase

Allotments have been in existence for hundreds of years, with evidence pointing back to Anglo-Saxon times. However, the modern system of allotments has its roots in the Nineteenth Century, when land was given over to the labouring poor for the provision of food growing. This measure was desperately needed thanks to the rapid industrialisation of the country and the lack of a welfare state. In 1907 and 1908 two Small Holdings and Allotment Acts were introduced imposing on boroughs, urban districts and parishes, the obligation to create allotments where none could be provided from private land. Major provision in Birmingham by the Local Authority stemmed from this. Thus by 1910 the Corporation administered more than 97 acres of land for allotments, providing 866 people with plots of about 500 square yards. Private provision, though, still dominated. In 1913, 177 private sites covering about 732 acres existed within the city boundary and the Corporation controlled 428 acres. However it wasn’t until the end of the First World War that land was made available to all, primarily as a way of assisting returning service men (the Land Settlement (Facilities) Act, 1919) instead of just the labouring poor. The rights of allotment holders in England and Wales were strengthened through the Allotments Act of 1922, but the most important change can be found in the Allotments Act of 1925 which established statutory allotments which local authorities could not sell off or convert without Ministerial consent.


The Land Settlement (Facilities) Act 1919 allowed local authorities to provide smallholdings to veterans of the First World War. The legislation was enacted to encourage the acquisition of land for the purposes of smallholdings, reclamation, and drainage, and to generally facilitate the settlement of land. Persons purchasing land under the provisions of the Act were known as Land Settlers. Section 18 of the Act provided that a county council may make or guarantee an advance by way of loan to any tenant or prospective tenant of a small holding provided by the council under the Act, of such sums as they think necessary for the purchase of livestock, fruit trees, seeds, fertilisers, and implements required for the purposes of the holding.


A major proponent of Smallholdings and Allotments was Birmingham MP Jesse Collings who founded the Allotments Extension Association in 1883 to promote the formation of allotments and smallholdings. He was Mayor of Birmingham 1878 - 1879, MP for Birmingham Bordesley from 1886 - 1918, and when Joseph Chamberlain was President of the Board of Trade in 1880, Collings acted as his unofficial advisor on agricultural matters affecting peasants in Britain and Ireland.


Requests for loans by Land Settlers were dealt with by Local Authorities - in the case of Birmingham, by the Agricultural and Small Holdings Committee. This Committee having decided on the merits of all such applications, loans were made to borrowers by a bank, with the Local Authority guaranteeing the loan.


At a Bank Committee meeting held on January 5th 1920, the City Treasurer confirmed that under Section 18 of the Land Settlement (Facilities) Act, 1919, the Corporation was authorised to arrange for the settlement of men on land and in certain cases to obtain loans for the prospective settlers. The Treasurer considered that such loans could be provided by the BMB. Accordingly the Committee resolved:

"That this Committee approves the principle of advances under the Land Settlement (Facilities) Act, 1919, being made by the Municipal Bank and authorises the Treasurer and Manager, in consultation with the Town Clerk, to submit a Scheme to the Finance & General Purposes Sub-Committee."


The Corporation's Agricultural & Small Holdings Committee were responsible for deciding the amount of the loan to be granted. In February 1920, a copy of a Resolution passed by that Committee was received by the Bank:

"That the Bank Committee be recommended to obtain whatever legal powers may be necessary to make advances to Small Holders."


Subsequently, HM Treasury confirmed that the Bank's Regulations provided the authority to make advances under the Act, and the Ministry of Agriculture & Fisheries provided the necessary sanctions.


The agreement between the Bank and the Agricultural and Small Holdings Committee in relation to administering the loan scheme included the following points:


(a) That a form of guarantee for the advance and interest to be given by the Agricultural and Small Holdings Committee

       to the Bank shall be in such form as the Town Clerk considers necessary.

(b) The rate of interest to be charged in respect of the advance shall be 5 per cent.

(c) The payment of interest by the Borrower to the Bank shall be made quarterly on the usual quarter days.

(d) That the person to whom an advance is granted shall be at liberty to take up the advance in instalments, and to repay in

       instalments if he shall so desire, providing that the whole sum is repaid in accordance with the agreement entered into.

(e) That the Bank shall obtain from the Borrowers a promissory note or letter of engagement agreeing to pay.

(f) The Promissory Note to be obtained from the Borrower to be made out to the "Lord Mayor, Aldermen and Citizens of Birmingham".


At the Bank Committee meeting of June 7th 1920, the General Manager reported that the first advance under the smallholding scheme had been approved: Frederick William Spicer, of London Road, Canwell, Sutton Coldfield was loaned £30. The following month, an advance of £12 was made to Mr H Dighton of 1 Ilsley Road, Erdington, and in August two advances of £50 each were approved for W H Hammond and J G Wright. Later in the year, these two gentleman were granted further advances of £75 each. In October 1922, an advance of £50 was made to Frank Evans, who was described as "a depositor outside the City"; in this case, therefore, the guarantors for the loan were the Warwickshire County Council instead of Birmingham Corporation's Agricultural & Small Holdings Committee.


On May 28th 1923, the General Purposes Sub-Committee reported to the Bank Committee  that

"a communication had been received from the Warwickshire County Council pointing out that the Ministry of Agriculture and Fisheries have arranged with the Bankers Clearing House for advances to small holders under the land Settlement (Facilities) Act to be granted at 1% over the bank rate, with a minimum of 4%,

"Your Sub-Committee were of opinion that in view of the interest in force on House Purchase advances the present rate charged to small holders, viz 5% should be maintained, and directed that the Warwickshire County Council be informed accordingly."


Only 31 Land Settlement advances were made as the figures in the accompanying table shows. Of the 17 loans made in 1922/23, one was that detailed above that was made on behalf of Warwickshire County Council. The amounts outstanding at each year-end being as detailed below. By the year 1926/27, all the loans had been repaid.


The amount outstanding at each year-end was shown as an Asset in the Bank's Balance Sheet under 'Land Settlement (Facilities) Act, 1919 - Amount Repayable by Small Holders'. All such balances have been included within 'House Purchase Advances' elsewhere on this website.



Year Ended

March 31st


























The question of extending the policy of lending to depositors for the acquisition of smallholdings to include the purchase of allotments was examined in November 1921 when Councillor Tiptaft asked the General Manager to raise the matter with the Town Clerk. The view of the Town Clerk was that the Bank could not make such advances directly to allotment holders, but it was competent for the Bank to advance money to a Corporation Department (eg the Parks Department), to meet such cases. Consequently, the Finance & General Purposes Sub-Committee (in December 1921) recommended that no action should be taken to make such advances.


The legal position was overcome by virtue of Sections 56 and 57 of the Birmingham Corporation (General Powers) Act, 1929 as reported by the Finance Sub-Committee to the Bank Committee on February 17th 1930:


Your Sub-Committee report that members of the Handsworth Horticultural and Allotments Association propose to make applications for advances in respect of allotments, and the General Manager has in consultation with the Town Clerk, prepared a suitable form of application which your Sub-Committee have approved.


It is recommended that as a general practice such advances be granted for a period not exceeding ten years, and that repayments of the advances and interest be made quarterly.


The Bank Committee minuted:

On consideration of the paragraph in the foregoing report relating to applications for advances for the purchase of allotments, the Committee were reminded that the City Council had delegated to the Bank Committee Sections 56 and 57 of the Birmingham Corporation (General Powers) Act, 1929, and it was:

3678   RESOLVED:- That the Finance Sub-Committee be authorised and instructed to exercise the powers of this Committee with regard to the making of advances for the purchase of allotment land, with a direction as a general rule to grant such advances for a period not exceeding 10 years and to arrange for the repayment of principal and interest to be made by quarterly instalments.


In March 1930, the Finance Sub-Committee authorised Councillor Cooper and the General Manager, "as a matter of urgency, to deal with applications for advances by members of the Handsworth Horticultural and Allotments Association Ltd, and to sanction advances in approved cases up to a maximum of 90% of the valuation of the land".


A total of £876 was subsequently advances for 25 allotments. The following table provides details of the advances and (where known) the date that the loans were repaid:


Name of Borrower


Advance (£)



(see NOTE)


Plots at St Andrews Gardens,

Oxhill Road, Handsworth:



Harrington, J T




Daley, J




Daley, P T




Easter, J




Easter, J C




Crisp, T




Crisp, T




Crisp, T




Holder, T A




Critchlow, Thomas



18/2/1933 (2)

Critchlow, Thomas



18/2/1933 (2)

Bell, C




Quantrill, G




Hunt, H J




Hunt, H J




Swindale, R




Preston, J




White. G B




Poppitt, F




Milner, W J




Milner, H J




Milner, H J




Cook, J




Cook, J




Handsworth Horticultural &

Allotment Association Ltd

Land at Oxhill Road,






(1) Date of Discharge: date of Town Clerk's report notifying that advance had been repaid

(2) House Purchase Sub-Committee: February 20th 1933:

Your Sub-Committee report that possession was obtained of the allotment land Nos 35 and 36, St Andrews Gardens, and the mortgage in respect of No 36 has since been paid off. An application by Mr T A Holder of 26, Uplands Road, Handsworth, for an advance in respect of allotment No 35 has been granted in the sum of £25.

Plot 35 was also purchased by Mr T A Holder (for £31); paid off 18/7/1935.


The following advances for allotment land were also recorded in the Bank's minutes:


Minute Date







W E Romney of

656 Stratford Road,



Garden Plot No 17 in the accommodation road leading from Baldwin's Lane, Hall Green



Mr J V & Mrs L V



Allotment back of

Stuart's Road, Yardley





Varnish Lane,





Miss I E Cottrell


Allotment at rear of

Tessall Road,

Hall Green




On April 24th 1931, the House Purchase Sub-Committee reported on the subject of  Advances under the Small Dwellings Acquisition Acts:

Your Sub-Committee have considered a Minute received from the Estates Committee to the effect that your Committee should appoint representatives to confer with the Estates Committee with regard to a recommendation contained in the following report of that Sub-Committee that applications for advances for the purchase of houses under the [Small Dwellings Acquisition Acts] should be favourably considered:


Extract from Report of Estates Sub-Committee.


With reference to Minute No 9887, your Sub-Committee have considered the communication from the Hon Secretary of the Municipal Officers' Guild, and wish to make the following observation thereon:


It should be noted that the Small Dwellings Acquisition Act of 1899, as amended by subsequent legislation, enables Local Authorities to advance money for the purchase or building of houses up to a value of £1,200, such advances to be repaid within such period, not exceeding 30 years, as may be agreed upon, and repayment may be made either by equal instalments of principal or by an annuity of principal and interest combined.


By the Rates of Interest Amendment Order (No 3) 1932, the Ministry of Health ordered that the rate of interest on such advances made on or after November 8th last should be reduced to 4¼%.


Your Sub-Committee have received a letter from the City Treasurer in which he points out that up to the present the Corporation have not made advances under the Act because to do so would have cut across the activities of the House Purchase Department of the Municipal Bank, and for that reason he would be reluctant to see the Council vary their policy in this respect, not only on account of its possible effect on the Municipal Bank, but also because presumably the establishment of duplicate machinery for the purpose of making advances for house purchase would be necessary. While appreciating this point of view, your Sub-Committee are of opinion that the Act would have the effect of stimulating the purchase of houses for owner occupation and might, in particular, be advantageous from the point of view of selling municipal houses.


They are accordingly of opinion that applications for advances should be favourably considered, subject to the necessary financial arrangements being made, but before this is done they consider it desirable that a conference with representatives of the Municipal Bank should be held, when the possibility of avoiding over-lapping should be fully explored; they accordingly recommend that the Bank Committee be asked to meet representatives of the Committee with a view to a full discussion of the matter.


Apart from the fact that wider powers are already delegated to the Bank under the Birmingham Corporation Act, 1919, the Treasurer has advanced arguments in favour of the existing procedure being continued as against advances being made under the Small Dwellings Acquisition Acts, pointing out that, while the rate of interest prescribed for loans under these Acts has fluctuated considerably, and has only recently been reduced to 4¼%, the interest charged by the Bank has not varied over a period of several years. This has resulted in the Bank Mortgagors enjoying advantageous terms compared with those offered by the Building Societies. Furthermore, the attention of your Sub-Committee was drawn to the uncertainty of the money market. Cheap money might not continue to be available, and having regard to the effect which any reduction of interest in relation to existing mortgages might have upon the finances of the Bank, it would seem undesirable to make any change until the monetary position had become more stabilised.


In view of the request of the Estates Committee to discuss the matter, however, your Sub-Committee recommend that the Chairman of your Committee and the Chairman of this Sub-Committee, with the Treasurer of the Bank and the General Manager, be appointed representatives of the Bank to meet the representatives of the Estates Committee on the question. At such conference the Treasurer has undertaken to submit tables showing the advantageous terms for interest and repayment offered by the Bank over a reasonable period of time, as compared with Building Societies, and indicating  the fluctuating rate of interest prescribed for loans under the Small Dwellings Acquisition Acts within recent years.


The proposal of the Estates Committee was not proceeded with following a conference that was held on May 9th 1933. The Bank's Chairman reported on the conference as follows:


The Bank representatives, consisting of Councillor Cooper and myself with the General Manager and Committee Clerk, together with the representatives of the Finance Committee, Alderman Grey, the City Treasurer and Committee Clerk, met the Estates (Sub) Committee on Tuesday, May 9th, to discuss the above question.


After hearing the views expressed by the representatives of the Finance and Bank Committees and the arguments against the adoption of a scheme to make advances under the Small Dwellings Acquisitions Acts in view of the powers already possessed by the Municipal Bank and the general financial  arrangements of the Corporation, the majority of the Estates Committee's representatives appeared to be convinced of the undesirability of proceeding further in the matter.


Although the Bank declined to make advances specifically under the Small Dwellings Acquisition Acts, relying on the standard House Purchase system to cover such cases, the option to make loans for Smallholdings and Allotments continued, though does not appear to have been greatly utilised up to the outbreak of the Second World War. In March 1937, the House Purchase Sub-Committee was empowered to deal with applications for loans on Allotments, instead of the General Purposes Sub-Committee, thus dealing with such loans in a similar manner to applications for loans on house purchase property.


Applications for advances to purchase Smallholdings were confined to the 31 cases noted above until, in May 1935, an application was received from a Mr J Kilby for an advance  to be made on a smallholding comprising two cottages and two fields. The application was considered but the Bank's valuer advised that it would not be desirable to make an advance on such security, and the application was therefore declined.