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          The Chairman (Alderman Barrow), along with Councillors Cooper and Martineau and the General Manager, has had a further interview with Mr Edward Boot, a Director of the First National Housing Trust, who contemplate the erection of 3,246 houses on the above Estate.

 

           Mr Boot stated that he and his colleagues had gone further into the terms of the proposed advance as put forward by the Bank, but had come to the conclusion that the financial effect, so far as they are concerned, would be rather heavier than they were inclined to undertake. As regards the first five years of the loan, Mr Boot said that they would have no objections to repayment being on the reducing method, but it would help them if the following period on the equated method could be extended to 25 years instead of 20 years as proposed. The Chairman and his colleagues do not consider this an unreasonable suggestion, and it is accordingly recommended that the Bank Committee should agree to such terms.

 

           With regard to the drainage system, Mr Boot intimated that while it was permissible within the bye-laws of the respective Local Authorities to drain into dumbwells, it was the intention of the Trust to drain into main sewers, and that a conference was being held between the Trust, the Aldridge Council and the Birmingham Corporation, with a view to arriving at a satisfactory financial agreement thereon.

 

           The question of mining rights granted to the Hamstead Colliery Co under the land, has been fully gone into by Mr C F Nightingale of Walsall, whose report has been received. Mr Nightingale concludes with the following sentence:

           

            "Having taken into consideration the points which I have enumerated in the foregoing report, I am of opinion that the Municipal Bank would not be incurring an undue risk in making the Loan as before the Mines have been developed to any great extent the First National Housing Trust should have paid off such an amount of Principal as would more than cover any depreciation which the property might suffer owing to subsidence caused by the working of the Mines."

           

            After the interview with Mr Boot, the Chairman and his colleagues came to the conclusion that in the interests of the Bank it was desirable to have a second opinion as to the value of the proposed houses, and accordingly Messrs Chesshire, Gibson & Co were requested to go fully into the matter and furnish a report and valuation, which have now been received. The valuation of Mr Wilde and of Messrs Chesshire, Gibson & Co are as follows:        

   

	Mr Wilde £	Chesshire, Gibson & Co £
Type A	375	400
"     B	375	400
"    C (2 bedrooms)	350	375
"     C (3        "        )	375	400
"     D (2        "        )	350	375
"     D (3        "        )	375	400
Type E	375	400
Type F	400	400
Type G (2 bedrooms)	350	375
"     G (3      "        )	375	400

 

            Messrs Chesshire, Gibson & Co suggested that the usual percentages adopted by the Bank for progressive advances are reasonable, but that the final advance should not be made until the roads have been completed to the satisfaction of the Local Authority.

           

            The financial effect of the proposed loan would be as follows:

 

           (A) Loan of £1,110,913 based on repayment in 25 years by a fixed monthly instalment of principal with interest at 4% per annum charged on the monthly amount outstanding.

 

           

	Principal repaid £.s.d.	Interest paid £.	Balance outstanding £.s.d.	Percentage of balance to valuation
1st year	44,436.12.0.	43,622	1,066,478. 8. 0.	86.4%
2nd  "	44,436.12.0.	41,845	1,022,041.16.0.	82.8%
3rd  "	44,436.12.0.	40,068	977,605. 4. 0.	79.2%
4th   "	44,436.12.0.	38,291	933,168.12.0.	75.6%
5th   "	44,436.12.0.	36,514	888,732. 0. 0.	72%

 

            (B) Loan of £888,732, based on repayment in 25 years by a fixed monthly sum representing principal and interest, the latter charged at 4% per annum.

 

                       6th and subsequent years the annual payment, calculated on yearly

                       interest rests, would be £56,889, but if calculated on half-yearly

                       interest rates the annual  payment would be £56,564 in two instalments of £28,282 each.

 

                       The effect would be to reduce the loan as follows:

 

 

                       

	Balance on annual rests	Balance on half-yearly rests
10th year	£773,150	£773,681
15th   "	£632,525	£633,434
20th   "	£461,433	£462,474
25th  "	£253,274	£254,074

 

            It is understood that the Trust would apply for advances from time to time in respect of blocks of 100 houses, or thereabouts, the actual number being dependent on the layout of the site and the position of the sewers.

           

           The advances would have to be made by way of progressive mortgage in the first instance, and upon certificates issued by the Bank's Valuer on the following bases of percentages:

 

                       20% when buildings are up to first floor joists.

                       25% when roof, eaves, gutters, and downspouts are fixed.

                       20% when plastering is done, floors laid, and partitions built.

                       20% when internal fittings have been fixed and drains connected.

                       15% when painting is completed, fences erected, roads completed to the satisfaction of the Local Authority,

                                and houses ready for occupation.

 

                       Interest at the rate of 4% per annum would be payable monthly on such advances.

 

                       After each fifth advance has been made the progressive mortgage will be discharged, and a new mortgage created for

                        the full amount represented by the discharged mortgage, the term of years and method of repayment to be as follows:

           

                       For the first 5 years the repayment to be by a fixed monthly instalment of principal,

                       with interest at the rate of 4% charged on the monthly balance outstanding.

 

                       For the remaining 25 years, the repayment to be by a fixed sum representing principal

                       and interest at 4%, payable monthly throughout the period of the loan, and calculated on

                       the balance outstanding at the end of the first 5 years.

           

                       The charges in respect of certificates for payment issued by the Bank's Valuer would

                       be payable by the Trust on terms to be mutually agreed.

                       

                       The Trust would be required to pay the Town Clerk's charges for preparing the

                       progressive mortgages, but there would be no such charges for preparing the

                       replacement mortgages. All stamp duties would be payable by the Trust.

 

                       In view of the uncertainty of monetary rates, it is the opinion of the Chairman and

                       his colleagues that the offer of advances as outlined above should be subject to the

                       scheme proceeding at once, and being completed within a period of 3 years from the

                       date of the first advance.

 

                       May 31st 1937.

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First National Housing Trust