Other House Purchase Schemes
Systems, Policies, and Methods examined prior to the
inauguration of the BMB's House Purchase Department
House Purchase
Early in 1919, in anticipation of the proposed Birmingham Municipal Bank being granted the power to make advances for the purpose of purchasing houses, the City Treasurer and the Bank's Manager were requested by the Management Committee to "obtain any information with regard to house purchase schemes that is available from outside areas such as Metropolitan and Yorkshire Districts" and "that, for the present, no direct application be made to the local Building and Co-operative Societies for information as to their views on the establishment of a Municipal Savings and Housing Bank, but that the Manager be requested to collect any information that may be available through other channels as to the position of these Societies."
Fact-finding visits were made to Bolton, Burnley, and Ilford, and the following reports produced. In due course, the new Bank based its House Purchase facility on the basis of Bolton's system, but choosing to capitalise interest charges on a monthly instead of quarterly basis.
In order to obtain evidence in support of the Parliamentary Bill promoting a scheme for the formation of a Savings and Housing Bank, and in accordance with the directions of the Committee, we visited Bolton by arrangements made by the City Treasurer for the purpose of investigating the system in vogue for residents to purchase their own houses.
In Bolton the principal agency is the local Co-operative Society, a very large undertaking, which also carries on the business of a Savings Bank. There is a Building Society in the Town, but this is only in a small way. Bolton also possesses a Trustee Savings Bank. The reason why Bolton occupies such a prominent place in House Purchase schemes undoubtedly lies in the confidence which the public have in the Co-operative Society and the simplicity of the system introduced. It is evidently the desire of large numbers of Bolton people to own their houses. There is no dearth of applications for advances with that object in view even at the present time.
The Manager also visited Burnley where the principal agencies are two very large Building Societies who claim to be responsible for the purchase of one-fourth of Burnley's houses. They further claim that Burnley is the foremost town in the country in the number of artisans owning their own houses. A Co-operative Society is in a fair way also in the town and does a little in the House Purchase business, while the Yorkshire Penny Bank is also installed in this town. One of the directors of the Building Society, whom the Manager interviewed, ventured the opinion that the reason why Building Societies do not flourish in the Midlands to the same extent as they do in Lancashire is because of the character of the employment. The present workers in the cotton trade are the descendants of past workers in the same trade, and it is likely to be so in the future. In engineering and other trades there is often an inducement for a man to move from one town to another, and sometimes the necessity for his doing so arises.
A synopsis of the information gathered from these two towns is annexed, which may be helpful to the Committee in formulating their policy not only in connection with the Bill before Parliament but for the establishment of the new Bank, and if it is decided as we suggest, to have further assistance in connection with the Bill from outside the City, a good witness could be obtained from Bolton in the person of Mr William Forber, JP, an ex-President of the Bolton Co-operative Society and President of the Bolton Labour Party. He is described as a sound man, and one who is held in high regard by the public in Bolton. Similarly in Burnley Mr J W Heap, a director of the Burnley Building Society is looked upon as an authority on Building Society procedure, and if considered advisable could be had as a witness.
The Treasurer reports that he has had a conversation with Sir Edward Holden, the Managing Director of the London Joint City and Midland Bank, regarding the attitude of the Banks towards the Savings and Housing Bank proposals.
Continuing the investigations into House Purchase schemes the Manager visited Ilford in accordance with arrangements made by the City Treasurer.
Ilford is a town of some 90,000 inhabitants and is one of the places where a Local Authority has put into operation the Small Dwellings Acquisition Act 1899.
The town of Ilford may be described as suburban rather than industrial, there being very few works in the town. The class of house purchasers are mostly clerks working in the City of London, or local tradesmen, very few artisans being amongst the purchasers. The Council have never advanced money on buildings in course of erection, and the provisions of the Act relating to the purchaser residing in the house are enforced. The vendors of property on certain residential estates offer special facilities to intending purchasers of a second mortgage repayable over a period of 8 years by quarterly instalments, which various mortgagors avail themselves of.
There are Building Societies operating in Ilford as well as theCouncil Scheme, but it is said that the residents prefer to deal with the Local Authority and the tendency in that direction becomes more marked as time goes on.
The Council have had no occasion to foreclose on any property, nor to levy a rate in connection with the scheme.
Insurances are effected by the purchasers who see to the premiums being promptly paid. There is no difficulty in procuring receipts for premiums.
The Council have not had occasion to build houses, as private enterprise have always met the demand, but a proposal is now before the Council for the erection by them of houses for the working classes in certain parts of the district where such demand has arisen.
The houses viewed from the outside appear to be substantially built and are attractive in appearance. They are said to be fitted with all modern conveniences and are eagerly applied for when vacant.
A synopsis is attached of the principal items in the Council Scheme.
History of the
House Purchase