COMPANY MEETING
LEICESTER PERMANENT BUILDING SOCIETY
MR. NORMAN D. ELLIS ON INADEQUACY OF PRESENT MORTGAGE RATES THE Annual General Meeting of the Leicester Per- manent Building Society was held on April 25 in Leicester.
Mr. Norman D. Ellis. O.B.E. M.A., J.P. (Chair- man) presided and. in the course of his speech, said:
Despite the uncertain conditions which applied during the whole of 1965 the Society's net results were eminently satisfactory and total assets increased by over 19'' from £125.925.959 to £150.013.746.
Advances for 1965 at C27.553.206 were below the record figure of £31.855.200 achieved in 1964. Over one half of our lending was in fact on newly-built houses and we financed the purchase of I in every 40 of all houses built for private occupation throughout the country.
PRESENT POSITION
The improved trend which was apparent during the second half of 1965 was maintained during January and February. During March. however, there was a noticeable change resulting in a reduc- tion in the surplus available for lending. As a safeguard against an increased flow of mortgage applications following restrictions imposed by other societies we have bees compelled to re-introduce
"mortgage quotas'. As ?et these are not particularly onerous and I see no reason why we should not continue to meet normal demands.
Our target for 1966 is to lend £35 million and to achieve this we shall require an average invest- ment surplus of 12 million per month.
INTEREST RATES
It is quite obvious that the mortgage rate charged to new and existing borrowers is out of line and must be increased unless the forthcoming budget provides substantial relief from the taxation at present imposed on building societies. There can be no possible justification for maintaining a rate structure sshich gives us a totally inadequate margin and an early review of this matter by the Asso- ciation as soon as the budget proposals are known is essential.
It should be appreciated that unless margins are adequate growth must be restricted and in conse- quence there must be a shortage of funds available to young couples for house-purchase. If building societies are to meet this demand for mortgage funds and maintain the Reserve ratio required for Trustee status margins must be related to growth.
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