Tory group proposes more help for first-time house buyers
Conservative leaders, anxious to make housing one of their top policy priorities, are considering ways of giving more financial help to home buyers.
In an interim report presented to the Conservative leader, Mr. Edward Heath, a policy group headed by Mrs. Margaret Thatcher has put forward two major proposals—a reduction of the tax payable by building societies, and more help for first-time buyers.
The proposals will now be discussed in depth before going to the “shadow” Cabinet for inclusion in the party manifesto. A key factor will be the cost of the proposals, which will have to be vetted carefully by Mr. Robert Carr, “shadow” Chancellor, and the party's economic experts.
The new proposals relate to the lump sum of tax building societies pay the Inland Revenue to compensate for allowing depositors interest at a high tax-paid rate. It is understood the changes would not affect tax relief to borrowers.
One of the purposes of the changes would be to ensure a high level of deposits with building societies so that they could increase the rate of borrowing, while maintaining a stable rate of interest.
One method suggested by the Tory group is to cut the present composite tax rate paid by the societies, whose current tax bill amounts to over £430m. a year. Help for first-time buyers could take the form of a lump sum to complement their building society savings.
Mrs. Thatcher, “shadow” Environment Minister, said on BBC radio yesterday that housing must be given top priority by the Conservatives. This could be done by building houses either for council tenants or for owner-occupiers.
The major difference was that subsidies in taxes and rates on council houses averaged £900, compared with £280 a year average tax relief to owner-occupiers. The Conservatives, she argued, were in favour of more building in the private sector, which was in any event in line with party philosophy.
Asked whether money would be available from the Treasury, Mrs. Thatcher said that the last Conservative administration had given a direct grant to the building societies to stabilise their rate of interest. She saw no reason why Treasury help could not be given in other ways.