Assisted Housing Scheme
Then Bank's House Purchase Department initially developed at a phenomenal rate which can be attributed to two factors. Firstly, the general publicity given to house ownership at the end of the First World War, and, secondly, the inducements offered to citizens to buy municipal houses. In October 1922, the city council decided to provide facilities allowing municipal tenants to buy their homes. The Bank and Estates Committee were directed to prepare a scheme. After many conferences a joint report was presented to the council in January 1923 and the authorisation of the sale of municipal houses was obtained. It was agreed that the money received from such sales should be used for building additional houses. At this time the Public Works and Town Planning Committee fixed the sale price before a house was handed over to the Estates Committee for resale. When the scheme was inaugurated the Bank advanced up to 80% of the value of the house. A copy of the Joint Report is reproduced below.
House Purchase



The Council will recollect that on the 24th October last the following resolutions were passed on the report of the Public Works and Town Planning Committee, viz:- 


  26079. That the policy recommended by the Public Works and Town Planning Committee that facilities should be offered to the tenants of municipal houses to buy the houses in which they reside be approved and adopted, and that the Estates and Bank Committees respectively be, and they are hereby, instructed to consider this policy and prepare a scheme for bringing the same into effect for submission to this Council at the earliest possible date. 


  26080. That the Estates and Bank Committees respectively be instructed to prepare and submit to this Council for consideration a scheme for advancing money by way of mortgage to persons to build or purchase houses, repayable on the instalment principle, and subject to the conditions contained in Section 7 of the Birmingham Corporation Act, 1919. 

Your Committees have jointly considered these resolutions, and the following schemes are now put forward for consideration by the Council.

                                                                   SALE OF HOUSES ERECTED UNDER THE ASSISTED


The Corporation are empowered to sell houses erected under the Assisted Housing Scheme by Section 15 (1) (d) of the Housing, Town Planning, etc, Act, 1919, which reads as follows: 

15 (1) Where a local authority have acquired or appropriated any land for the purpose of Part III of the principal Act, then, without prejudice to any of their other powers under that Act, the authority may:

(d) with the consent of the Local Government Board (now Ministry of Health) sell or lease any houses on the land subject to such covenants and conditions as they may think fit to impose either in regard to the maintenance of the houses as houses for the working classes or otherwise in regard to the use of the houses, and upon any such sale they may, if they think fit, agree to the price being paid by instalments or to payment of part thereof being secured by a mortgage of the premises; 

Provided that it shall be a condition of such sale or lease that the houses shall not be used by any person for the time being having any interest therein for the purpose of housing persons in his employment. 

Your Committees desire to point out that under the Economy (Miscellaneous Provisions) Bill, which was introduces by the late Government, it was proposed to repeal the proviso to the above section, but they are unable to state whether it is the intention of the present Government to proceed with this measure.

The sale of Assisted Scheme houses, in accordance with the Regulations of the Ministry of Health, falls into two groups:

  (a) The sale of houses already erected under the Assisted Scheme to present occupiers.

  (b) The sale of houses in course of erection under the Assisted Scheme to intending occupiers. 

In each case it is proposed that the Corporation shall retain the freehold interest, and that the leasehold interest shall extend for a period of 99 years, the ground rent being determined by the cost of land and cost of development. 

In a memorandum of the Ministry of Health dated May, 1920, they state that houses should be sold at the best price that can reasonably be obtained, regard being had to the conditions imposed, and they state that this may be interpreted as meaning the fair market price for the time being. They will therefore be prepared to consent to proposals for sale of houses at that price, provided that having regard to all the circumstances, they consider it reasonable. The market value of houses erected during 1920 and 1921 will obviously be considerably less than the cost of erection, and it is probable that the fair market price will be less than the actual cost of erection in regard to houses more recently erected, and sales may accordingly be approved at less than cost price, but hitherto the Ministry of Health have not been willing to approve a sale at such a figure as will involve an increase in the estimated deficit under the Assisted Scheme. 

A communication has been forwarded with a view to prices being fixed at which the various types of houses may be sold. It is believed that many persons would be prepared to buy houses now in course of erection, ay cost price. To arrive at a correct figure information will be required as to the cost of land, development charges, and cost of completed buildings, together with any miscellaneous charges there may be. 

Under the Ministry’s instructions the minimum cash payments required from purchasers are as follows:

  £20 where period of repayment of balance is spread over 15 years.

  £35    "         "            "         "             "        20    " 

  £50    "         "            "         "             "        25    "

Repayment of the balance of the purchase money with interest can be made by equal weekly or monthly instalments. 

Local Housing Bonds must be accepted by a local authority at their face value, together with accrued interest, in payment or part payment of the purchase price of a house erected by another local authority he may offer the bond (with accrued interest) in payment or part payment of the purchase price by transferring it (by transfer deed) to the selling authority. 

The rate of interest charged under this Scheme is as may be fixed from time to time by the Ministry of Health, the present rate being 5½ per cent. 

It is open to a local authority to include in the contract for sale provisions enabling the purchaser to cancel his instalment agreement upon fair terms or to re-sell his interest in the house to the local authority, in the event of circumstances arising which make it necessary for him to do, eg, inability to continue the payments or a call to move from the district. It is also open to the local authority to reserve a right of pre-emption in the event of the purchaser proposing to dispose of his interest in the house. 

The Ministry suggest certain covenants for inclusion in the form of Mortgage and that the tern of Mortgage may conveniently follow the general lines adopted by Building Societies and similar institutions in the case of Mortgages repayable by instalments. In particular the instrument should contain (a) covenants on the part of the Borrower to repair and maintain the premises in good condition, and not to lease without the Council’s consent; (b) a right on the part of the Borrower to repay at any date when an instalment is due the whole or a part of the remaining instalments, and (c) liberty for the Council’s agents to enter and inspect the premises at reasonable times. Provision would be made for insuring against fire. 

The Ministry’s regulations provide for the application of sale proceeds may be applied either in or towards purchase of other land for housing purposes, or, with the consent of the Ministry, to any purpose, including repayment of borrowed money, to which capital money may properly be applied. 

The sale of Assisted Scheme houses should not be effected at prices more favourable than would apply to the sale of any houses to be built under the Corporation’s own scheme of building. 

For the information of the Council your Committees submit below a statement showing the operation of the sale of houses under this Scheme on a house being sold for £435.

  Purchase price of house, say  ....  ....  .... .....  £435

  Cash payment required  ....  ....  ....  ....  ....  ....  £35

  Balance on Mortgage  ....  ....  ....  ....  ....  .....  £400

  Repayment of loan    .... ....  ....  Over period of 20years,

                each monthly instalment amounting to £2 16s 6d.

Expenses in connection with the sale of houses would be charged against the Assisted Scheme accounts, and would rank for Government assistance. The powers of the Bank Committee do not permit them to administer the Ministry’s scheme for the sale of houses, but it is probable that your Committee can formulate a scheme whereby the existing machinery of the Bank Committee can be utilised on behalf of the Estates Committee, and your Committees propose to further consider this subject. 

The Ministry of Health suggest that steps should be taken to make the facilities offered for the sale of Assisted Scheme houses widely known, and your Committees recommend that they be authorised to do this.



With reference to Council Minute No 26,080, your Committees have jointly considered the matter and now report as follows: 

The necessary powers for facilitating the erection of houses and advancing money be way of mortgage to persons to build or purchase houses are contained under Section 7 (1) (2) and (3) of the Birmingham Corporation Act, 1919, which is as follows:

  7  With a view of encouraging and facilitating the erection of buildings the Corporation-

  (1)  May promote the formation or extension of housing societies and of any societies or  bodies whose objects are or include the erection, improvement or management of dwelling-houses;

  (2) With the consent of and subject to regulations made by the Local Government Board may for the purpose of assisting a housing society subscribe to the capital of the society or guarantee advances made to the society upon such terms and conditions as to the rate of interest and repayment or otherwise and on such security as the Corporation  may think fit;

  (3)  May make advances upon the security of freehold, copyhold or leasehold estate by way of mortgage to any person, society or body undertaking to build, purchase or acquire a dwelling-house or dwelling-houses within the city, or any interest therein, and for this purpose shall have power to hold land with the right of foreclosure subject however to the following conditions:

    (a)  The Corporation shall be satisfied that the value of the premises is sufficient, and that the title thereto is one which an ordinary mortgagee would be willing to accept;

    (b)  The repayment of the advance with interest within such period not exceeding thirty years as shall be agreed shall be secured by an instrument vesting the ownership in the Corporation subject to the right of redemption by the mortgagor;

    (c)  The provisions of Section 42 of the Building Societies Act, 1874, with the necessary modifications shall extend to and apply for the purposes of this section.

The Bank Committee already have power to advance money by way of mortgage to enable persons to purchase houses already erected. The powers under the above Section might therefore appropriately be taken under the following heads:

    (A)  Advances by the Corporation to builders prepared to build upon plots created by the Corporation, or on other approved lands;

    (B)  The promotion, formation, and extension of Public Utility Societies or other bodies,whose objects include the erection of dwelling-houses, and the leasing to such societies of lands for development, and further in suitable cases, subscribing to the capital of the society and holding shares therein;

    (C)   The sale of houses to be erected by the Public Works and Town Planning Committee in accordance with the Scheme recently authorised by Council Minute No 26,074. 

With regard to (A) the following observations are made:

The builder of small houses has, generally speaking, sufficient capital to build one or two houses, and when he can rely upon purchasers his work can be made continuous.

In order to encourage this class of building, builders might be invited to approach the Corporation for financial assistance. Such assistance could be assured on the following lines, and would be confined to houses costing not more than £700 (exclusive of the value of the land), or such other limit as may be decided from time to time:

  (1)  The promise of a definite sum to be advanced by the Municipal Bank to the purchaser on completion to the satisfaction of the Bank’s  Valuer of the house which the builder is proposing to erect. Many builders have examples of houses already built which they are  prepared to repeat, and this would be a good guide to the Bank’s Valuer in arriving at his valuation, but where there is no such example the Bank Committee would be prepared to decide that valuation from an examination of complete plans and specifications submitted to them. The actual advance would not be made until the building of the house is complete.

  (2)  An advance by the Corporation to the builder by way of progressive mortgage during the progress of building up to, say, 40 per cent of the value of the work done when the building reaches chamber joist height, with chamber joists fixed, and further definite advances at subsequent stages. In the case of building on Corporation land, an agreement to lease should be given in the first instance, the builder or his nominee (ie the purchaser) becoming entitled to his lease on completion of the house. The Corporation would be at liberty to determine the agreement and re-take possession if the building is not proceeded with. In  the case of any such failure, the Corporation would be at liberty to step in and complete the building. An account of the costs so incurred would be kept, and on sale of the house within a reasonable time any surplus would be handed over to the builder.

  (3)  On completion of the house the lease would be granted to the builder or direct to the Purchaser, who would then become the Mortgagor to the Corporation, the advance to the to Purchaser to be arranged as provided for by Section 12 of the Birmingham Corporation Act, 1919, and through the Municipal Bank.

Your Committees are of opinion that if the above course were adopted it would result in the builder being set free to build further houses.

In the case of progressive mortgage they consider that as far as possible advances should be on buildings erected on freehold lands belonging to the Corporation, but where this is not possible should be restricted to freehold land belonging to the builder, which could be mortgaged to the Corporation by way of security, a first advance then being made to the builder of two-thirds of the value of such land and then on progressive mortgage as building proceeds, as in the case of building on Corporation lands. 

With regard to (B) the following observations are made:

(i) Encouragement should be given to Public Utility Societies and other suitable bodies, in order to speed up the erection of dwelling houses.

(ii) Where satisfactory security can be offered, we think that working capital might be provided by the Corporation. Houses could then be erected, and afterwards sold, thus enabling societies and builders to continue building with the money received from purchasers.

(iii) The public should be informed of the Corporation lands available, and where any society desires to consider development, every facility and encouragement should be offered, but each proposal would have to be examined on its merits.




Your Committees have further considered the sale of the houses to be erected in accordance with Council Minute No 26,074. Under this Minute the Public Works and Town Planning Committee were authorised to erect as many houses as possible during the next two years so long as the financial loss does not exceed the produce of a threepenny rate over the period.

Your Committees propose that advances should be made to purchasers of these houses through the medium of the Municipal Bank under the powers delegated to the Bank Committee by Part III of the Birmingham Corporation Act, 1919, and the Rules and regulations made thereunder, except in cases of a special nature (referred to in the summary of recommendations). The Bank are enabled under such powers to grant advances in approved cases for periods not exceeding 20 years up to 80 per cent of the market value of a house, it being necessary for a purchaser to first become a depositor in the Bank.



Your Committees’ recommendations may be summarised as follows:

1     The sale of assisted Scheme houses in accordance with the suggestions contained in the report and   subject to the consent  and regulations of the Ministry of Health.

2 The sale of other Corporation houses, under similar conditions so far as necessary or applicable, the money received from such sales to be utilised for the erection of other houses during the period and within the limits of financial loss authorised by the Council.

3 Your Committees to formulate a scheme for utilising as far as possible the existing machinery of the Bank Committee in administering the Ministry’s scheme for the sale of houses.

4 The Estates Committee to be authorised to publish by advertisement the facilities offered for the sale of Corporation houses.

5 The Finance Committee through the Estates Committee to advance money by way of progressive mortgage to persons to build houses on freehold land of the builder or his nominee, or on land leased from the Corporation, and the Estates Committee to grant leases on the terms and conditions mentioned in the report.

6 In cases of a special nature, the Finance Committee, through the Estates Committee, in exercising the powers contained in Section 7 (3) of the Birmingham Corporation Act, 1919, to allow the full period of 30 years as provided for in sub-section 3 (b) for the repayment of advances with interest made in connection with the purchase of houses erected by the Public Works and Town Planning Committee under Council Minute No 26,074.

7 The Finance Committee, through the Estates Committee, to provide capital to be advanced to Public Utility Societies, and other suitable bodies or persons for the erection of houses, as referred to in the report.

Your Committee recommend that, subject to the consent of the Ministry of Health where necessary, the foregoing proposals be approved and your Committees with the Finance Committee instructed accordingly.



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