HOUSE PURCHASE DEPARTMENT:
THE ASSISTED HOUSE PURCHASE SCHEME
(continued)
With a need for the progress of the formulation of the scheme to be reported to the City Council, a further Conference was convened
on July 20th 1925:
Present:
The Rt Hon The Lord Mayor (Alderman Percival Bower, MBE, JP)
The Town Clerk (Mr F H C Wiltshire)
Councillor
Appleby, Mr J P Hilton and Mr Everall - representing the Bank Committee
Councillor Kenning, Mr F T Cox and Mr W H Harris - representing
the Estates Committee
Alderman Williams, Mr J P Eames and Mr H W Alderman - representing the Finance Committee
Alderman Talbot, Councillor
W E Lee, Mr H H Humphries and Mr F Roberts - representing the Public Works and Town Planning Committee.
The Lord Mayor stated
that his object in calling a meeting at such notice was to afford an opportunity of discussing the advisability of reporting to the
City Council upon the progress already made.
The Estates Committee when preparing their Report to be presented to the City Council
on the 28th July, had proposed to include a paragraph informing the Council of the decision to reduce the minimum deposits required
from prospective purchasers, but before the Report was actually circulated, he had been asked for his views upon the matter and he
had expressed the opinion that it would not be wise for such a Report to be presented to the City Council until the Conference as
a whole had had an opportunity of discussing it.
The Report which the Estates Committee proposed to present to the Council was
then produced, and it was unanimously agreed that, subject to various slight amendments, it should be approved and supported by the
Conference.
On July 28th 1925, the Estates Committee reported on the matter in question to the City Council, who approved the
Scheme.
On November 16th 1925, the Bank Committee received from the Council's Finance Committee, details of the indemnification
that the Bank required in order to advance loans above its statuary 80% of valuation limit. However, this was later amended as indicated
in the following reproduction of the Finance Committee's Resolution received on December 21st 1925:
2463 RESOLVED: That Minute
No 2376 of the 9th October 1925 be rescinded and in lieu thereof this Committee:
(1) Confirm the action of the Chairman and Treasurer
in provisionally granting to the Bank indemnifications during the vacation in cases where the difference between the advance required
by the purchaser and the amount which the Bank are authorised to advance exceeded £75 per house.
(2) Approve of the administrative
change recommended in the foregoing report whereby the Bank may proceed to deal with all cases without the necessity for obtaining
individual indemnification in respect of each sale and
(3) Do, and they hereby give a general indemnification to the Bank in respect
of advances over and above the amount which the Bank are authorised to make having regard to the valuation carried out on their behalf
to any amount providing that it does not exceed the sale price of the house less £20 or £25 in the case of non-parlour and parlour
houses respectively the appropriate deposits as authorised by Council Resolution No 27343 passed at the Meeting on the 28th July 1925.
[Note:
the reference to "during the vacation" refers to the fact that Committee meetings were not held in August and September each year.]
In
the three years ending March 31st 1926, the following amounts were advanced by the Bank on loans for the purchase of municipal houses:
|
|
Number
of mortgages arranged |
Amount Advanced £ |
|
1924 |
158 |
41,595 |
|
1925 |
428 |
118,585 |
|
1926 |
820 |
269,262 |
With over 1,400 mortgages arranged, there were inevitably
some problems, and the Lord Mayor convened a Conference on June 30th 1926:
Present:
|
The Rt Hon The Lord Mayor |
(Alderman Percival
Bower, MBE, JP) |
|
Mr F H C Wiltshire |
Town Clerk |
|
Mr J P Hilton |
Bank Manager |
|
Councillor Kenning |
|
|
Councillor Roberts |
Representing the Estates
Committee |
|
Mr F T Cox |
|
|
Mr W H Harris |
|
|
Mr J R Johnson |
City Treasurer |
The Lord Mayor stated that the policy of the Corporation
with regard to the Sale of Municipal Houses on easy terms had proved successful but, as was inevitable in a scheme of such magnitude,
certain difficulties had arisen. There had been cases in which certain purchasers, through unforeseen circumstances, were unable to
meet their liabilities in respect of their houses. He had called the Conference in the hope that it would be possible to find some
method whereby the interests of the three Committees concerned would be fully safeguarded, while still affording the utmost relief possible to purchasers who might be in financial difficulties through circumstances beyond their control.
The Estates
Committee had drawn attention to several cases of this nature, and had expressed their willingness to repurchase the houses providing
the Finance Committee were agreeable.
If a defaulting purchaser was unable to sell his house privately and so pay off his debt
to the Bank, the Bank Committee had no alternative but to appoint a Receiver, who would sell the property in the open market at the
best price possible, which might conceivably mean a loss to the purchaser and the Finance Committee.
The Estates Committee's
representatives stated that although they retained an option to repurchase any Municipal House which might be offered for sale within
twelve months of the granting of the lease, they did not exercise that option if the owner had a prospective purchaser in view. They
further stated that in those cases where leases had been assigned privately, the selling price had, in every instance except one,
been equal to or higher than the price originally paid to the Corporation.
After further discussion it was decided to recommend:
(1)
That a Special Sub-Committee consisting of the Chairman and Chief Officials Chairmen of the Bank, Estates and Finance Committees
be appointed to meet monthly and be empowered to deal with cases referred to them by the Bank or Estates Committees.
(2) That in the
event of the Special Sub-Committee being satisfied that the circumstances justified it, the Estates Committee should repurchase the
house and discharge the Mortgage.
(3) That the ultimate disposal of the house (whether by sale or by letting) be left to the Estates
Committee, it being understood that in the event of a sale the purchaser should have the option of the low deposit terms in force
for Corporation houses.
It was agreed that these recommendations should be submitted to the three Committees concerned for approval,
and for the necessary authority to be given to the Chairman and Chief Official of each Committee.
However, in view of the fact
that there were certain cases outstanding which required early attention, the Lord Mayor subsequently convened a further meeting on
July 12th 1926, when the undermentioned cases were considered and dealt with in the manner below indicated:
Present
:
The
Rt Hon The Lord Mayor, in the Chair (Alderman P Bower, MBE, JP).
Councillor Kenning, Chairman of the Estates Committee; the City Treasurer,
the General Manager of the Municipal Bank and the General Manager of the Estates Department.
Mr J P Hilton (Bank Manager) submitted
for the Sub-Committee's consideration the undermentioned cases in which house purchasers had notified the Bank Committee that they
were unable to maintain their payments to the Municipal Bank:
|
L A Rose |
32 Fenton Road, Acocks Green |
|
P H Hefford |
12 Tilbury
Grove, Kings Heath |
|
Mrs L Robinson |
14 Beauchamp Road, Kings Heath |
|
H Wardell |
55 Jephcott Road, Ward End |
|
R Kellar |
119 Allcroft Road, Hall Green |
After
discussion it was:
RESOLVED:- That the Estates Committee be requested to repurchase the under-mentioned houses, and to discharge the
mortgages to the Municipal Bank:
|
32 Fenton Road, Acocks Green |
|
12 Tilbury Grove, Kings Heath |
|
14 Beauchamp Road, Kings Heath |
|
55 Jephcott
Road, Ward End |
|
119 Allcroft Road, Hall Green |
The circumstances of Mr Rogers, 4 Bordesley Green East, were considered and it was
decided that the General Manager of the Bank should endeavour to arrange for £34 of his original deposit to be repaid and placed to
an account in the Bank in the joint names of the depositor and Mr Hilton, but failing this arrangement it was agreed that the Estates
Department should repurchase the house and discharge the present mortgage.
In the case of Mr G H Taylor, an applicant for an
advance on No 73 Middlemore Road, Northfield - a parlour type house - it was reported that he had already a mortgage on a non-parlour
type house at No 64 Picton Grove, Billesley. His reason for wishing to change was that his circumstances had improved. Mr Hilton pointed
out that Taylor paid a deposit of £60 in respect of his present house and now only proposed to pay a deposit of £25.
RESOLVED:-
That the exchange be agreed to on the understanding that the same deposit applies, viz £60.
RESOLVED:- That future meetings of
this Sub-Committee be held at the call of the chairman.
The use of
a Special Sub-Committee to make decisions, some of which required a quick resolution, proved to be cumbersome. The Bank's House Purchase
Sub-Committee produced a report on December 20th 1926 with recommendations to improve the process.
Repurchase of Houses by the
Corporation, and Other Points.
Your Sub-Committee have had under consideration the practice which has operated for a few months
of referring applications for repurchase of Corporation houses to a Joint Conference of the Bank, Estates and Finance Committees.
Cases are brought forward to the Joint Conference by the Bank or Estates Department, and the recommendation of the Conference passed
on to the appropriate Department for action. This procedure involves delay in dealing with the cases, and as the Joint Conference
can only make recommendations, the reference back to the Standing Committee has to be followed. The Joint Conference have also had
before them cases where it is doubtful whether an advance ought to be made.
With a view to regularizing the procedure, and to
avoid delay, your Sub-Committee recommend the adoption of the following scheme:
1. The adoption of an income limit as a guide
in determining applications for purchase. Any case coming within that income limit, and provided circumstances indicate the continuity
of employment of the applicant, should not be queried by the Bank in respect of a mortgage.
2. Cases outside the income limit
should be considered by the General Managers of the Bank and Estates Departments. If both officers agree that the case is a "border
case" or that special circumstances exist which would justify an advance, then such application should be dealt with as in No 1 above.
3.
Cases outside the income limit where the Officers do not agree, should go to the Estates Committee for consideration. If that Committee
is of opinion that an advance should be made, the full facts of the case ought to be forwarded to the Bank through the usual channel,
and the Bank Committee deal with the matter.
4. Any case in which there is a difference of opinion between the Bank and Estates
Committees should be referred to a Joint Conference consisting of the Chairmen of the Bank, Estates and Finance Committees with their
respective Chief Officers, and the three Chairmen might be given some power by resolution passed by their respective Committees to
act. This would save delay in referring back.
5. All applications made by mortgagors to repurchase to be referred to and considered
by the Bank. Where the Bank Committee is of opinion that the application ought to be met, the full facts of the case should be forwarded
to the Estates Committee through the usual channels, and the Estates Committee deal with the matter.
6. Any case in which there
is a difference of opinion between the Bank and Estates Committees as to repurchase should be referred to the Joint Conference above
mentioned, and the decision of the Conference accepted and acted upon.
In the period 1921 to 1938 the following number of new
houses were built in Birmingham:
|
Area of the city |
Corporation Houses |
Private Builders |
Total |
|
Central Wards |
413 |
67 |
480 |
|
Middle Ring |
5,960 |
3,753 |
9,713 |
|
Outer
Ring |
40,968 |
42,913 |
83,881 |
|
|
47,341 |
46,733 |
94,074 |
Building on this scale required the availability of large volumes of materials
and large numbers of skilled craftsmen. Particular shortages related to bricks and bricklayers, resulting in the Corporation using
non-traditional methods of building - these included houses constructed largely of concrete. Two main contractors were used:
'Boswell
Houses': 1,370 houses were built by M A Boswell & Co Ltd of Wolverhampton, on the Pype Hayes Estate at Erdington, and on the Stockfield
Estate at Acocks Green;
'Boot Houses': 908 houses built by Henry Boot Ltd of Sheffield on the Witton Lodge Farm Estate in Perry
Common.
The walls of these houses consisted of two leaves of clinker concrete that was poured between metal shuttering. The walls were finished
externally with a roughcast; internally they were plastered. Many of these houses were sold by the Corporation and complaints regarding
their construction were soon being made by the purchasers, some of whom withheld their mortgage repayments as a consequence.