HOUSE PURCHASE DEPARTMENT:
ADMINISTRATION & POLICY
(continued)
Bank Committee: November 14th 1938
The General Manager submitted the following report as to a loan required by the Handsworth Wood Estates Limited in respect of a re-building scheme at Hamstead and the question of guarantees in respect of the required loan.
The Hamstead Colliery Company.
Mr N H Poole, Surveyor to the Handsworth Wood Estates Ltd, at the request of Mr Douglas James, has seen me with reference to a re-building scheme at Hamstead for which a loan is required.
It appears that the Colliery Company own about 150 houses in Hamstead Village which are to be demolished, and on the vacant site other houses of a modern type, to let at 12/6d per week inclusive, will be erected. The first section would comprise 28 houses with 3 bedrooms on land on the Old Walsall Road to the north of the Village, near to the Miners' Welfare Land. Quotations for the erection of the houses have been obtained, but a definite contract has not yet been entered into. The probability however, is that the Firm of Broomhead & Green would build the houses, which are priced at £375. Plans have been prepared by Excelda Housing Supplies Ltd, and can be seen by the Bank's Valuer. Houses of a similar type can be inspected in other parts of Birmingham.
Mines have been worked under the present houses to a depth of 750 yards, and sewers have been dealt with in conjunction with the Corporation.
The Company consider the houses could be sold at £450 freehold, although it is not intended to sell any houses.
The Directors do not wish to give personal guarantees in respect of the loan, but would be prepared to nominate their Secretary (Mr Leighton) and guarantee him.
The Directors of the Company are: E L Payton, D D James, A D James, and G E Vernon.
Before they can demolish they must have land on which to erect some houses into which the displaced tenants can be put, and for this purpose the Company have agreed to purchase from the Handsworth Wood Estates Ltd an adjacent plot of land.
The Directors of the Estates Company are the same as the Colliery, with the addition of Mr H D Poole.
Mr D D James and Mr A D James are also Directors of the Excelda Housing Supplies.
The application is for a loan by way of progressive mortgage in the first instance, and subsequently for a loan of 90% of £375 per house, repayable over 30 years, with interest at 4%.
The Halifax Building Society have been approached, but will not entertain the proposal unless
the Directors of the Colliery Company are severally and individually joined in the mortgage.
(November 12th 1938.)
6340 RESOLVED:- That the foregoing report be received and entered on the minutes and the matter referred to the House Purchase Sub-Committee for consideration.
The General Manager submitted the following report as to property - "Inverarey", 72 Hermitage Road, Solihull.
"Inverarey", 72 Hermitage Road, Solihull.
The Town Clerk and General Manager have considered what action should be taken in respect of above property which is in mortgage to the Bank. The account is in arrear, and the whereabouts of the Borrower are unknown.
Efforts to obtain a peaceable surrender of the property through the Borrower's Agents were not successful, and consequently steps were taken by the Bank's Agent to obtain entry and affix a new lock to the door. The Bank is now in possession, and the property can be put up for sale by auction. Mr Wilde has a Sale in the early part of December, and the property will be included in such sale.
The amount required to clear the indebtedness to the Bank is £826, to which expenses of auction must be added. The valuation of the property in 1936 was £900.
The mortgage is combined with endowment assurance, and accordingly, the monthly repayments only involve interest charges and assurance premiums, the capital being repaid by the Assurance Company at the end of the term of years for which the loan was granted. It will be necessary for the Bank to make the monthly premium payments until a sale is effected, when the policy would be re-assigned to the Borrower; but if a sale is not effected, then the Bank can recover the surrender value attaching to the policy.
The Chairman and Alderman Morland are of opinion that every effort should be made to sell the property, by auction if possible, but if unsuccessful, by private treaty, as it is unlikely a rental could be obtained which would more than cover the repayments under the mortgage, plus fire insurance and rent collection charges.
The view which the Chairman and Alderman Morland take is that to fix
a reserve in the normal way to cover all the charges, say £840, may handicap Mr Wilde in the sale if he had a lower bid which was
reasonable, and they therefore consider Mr Wilde should be told the amount required to clear the mortgage and expenses in full, and
that he should be authorised to accept a lower genuine bid rather than miss the opportunity of effecting a sale. The point then arises
as to what that lower bid should amount to, and the opinion of the Chairman and Alderman Morland is that we should be prepared to
accept £800.
(November 12th 1938.)
6341 RESOLVED:- That the foregoing report be received, entered on the Minutes and the proposals therein contained approved; that the Town Clerk and General Manager be authorised to take the necessary steps with a view to the sale of the property if possible by Public Auction or failing which by private treaty at a price sufficient to discharge the Mortgage and clear charges and expenses if possible, but in any case for not less than £800; also that the Town Clerk be instructed to prepare any necessary documents affixing the Corporate Seal thereto.
Bank Committee: December 19th 1938
The Town Clerk gave particulars of the difficulty which had arisen in respect of an application for an advance by the Deacons of Sparkhill Congregational Church to buy certain land, whereby owing to certain restrictions imposed by the Charity Commissioners certain responsible parties stated they were unable to join in the usual covenant set out in the Bank's Mortgage Deed for repayment of the moneys.
After consideration it was:
6372 RESOLVED:- That the Town Clerk be instructed to inform the applicants that unless all interested parties agreed to enter into the covenants in the Mortgage Deed, the offer to make a loan in this case will be rescinded.
Finance and General Purposes Sub-Committee: January 16th 1939
Transfer of Mortgages to the Bank by Members of the Staff.
In March, 1934, the Committee considered it desirable to require certain members of the staff who had bought their houses by means of mortgages with various lending organisations, to transfer such mortgages to the Bank.
The transfers in question, which affected ten members
of the staff, involved costs, charges and stamp duties amounting in total to £40. 1. 9., and your Sub-Committee, having regard to
the circumstances, have directed that the members of the staff concerned be reimbursed in respect of the individual payments made
in this connection.
Bank Committee: January 16th 1939
6392 The following report of the House Purchase Sub-Committee was presented:
Applications for Loans by Mr Douglas D James.
Mr Douglas D James has approached the Bank on the question of loans being made in respect of certain housing developments projected by him in various parts of Birmingham.
Your Sub-Committee intimated that they would be prepared to consider definite proposals and Mr James submitted plans and specifications to the Bank's Valuer in respect of 870 houses to be erected on the Rednal House Estate, Northfield, to be let at 17/6d. per week.
Mr James proposes to grant leases to the Excelda Housing Supplies Limited and provide for a payment of £5. 10. 0. ground rent per plot, although he states that such arrangement is nominal and that it is unlikely the ground rent would be collected.
Mr James has already effected a progressive mortgage with the Bradford Permanent Building Society in respect of the first 100 houses, and would only require an ordinary mortgage in respect thereof on the discharge of such mortgage. As regards the remaining 770 houses, Mr James would require progressive mortgages to be followed by ordinary mortgages.
Mr Wilde's valuation of the houses, subject to the ground rent of £5. 10. 0. per house, is £225 in respect of 3 bedroom type houses, and £200 in respect of 2 bedroom type houses.
After full consideration, your Sub-Committee decided that an offer of an advance be made to Mr James of 90% of Mr Wilde's valuation for a period of thirty years, interest to be charged at 4½% per annum, but reduced by ½% if payments are made on or before the due dates.
The General Manager further reported that Mr James had another estate near Spring Lane, Erdington, on which he originally intended to erect 127 houses, but now contemplates erecting maisonettes to rent. There appears to be no objection in principle to advancing money on maisonettes to rent and Mr James was asked to supply plans and specifications for the Bank's Valuer to consider.
As regards other estates
Mr James contemplates developing, there is nothing to report at present.
With reference to the report relating to proposals to grant loans to Mr Douglas D James in respect of houses on the Rednal House Estate, Northfield, the Committee decided as follows:
(1) That in respect of any advances made, Mr Douglas D James should be required to enter into a personal covenant, in addition to the Excelda Housing Supplies Limited, for the Mortgage payments; and
(2) That Mr James be informed that consideration would be given to increasing the proposed advances to such extent as may be possible in consideration of the Freehold being Mortgaged by way of Collateral Security.
On these understandings it was:
6399 RESOLVED:- That the proposals contained in the foregoing report to make an offer to Mr Douglas D James for advances on houses to be erected on the Rednal House Estate on the terms indicated in the report as above amended, be conformed; that the General Manager be authorised to make an offer accordingly; and that the negotiations proceeding with Mr James in regard to advances upon other properties be approved.
Bank Committee: May 15th 1939
With reference to the offer of a loan to Mr Douglas D James in respect of houses to be erected on the Rednal House Estate, Northfield, the following suggested letter from the General Manager containing the proposed revised offer was read and approved by the Committee, subject to any drafting amendments considered necessary after consultation with the Town Clerk:
May 16th 1939
To: Douglas D James, Esq., Lombard House, Great Charles Street, Birmingham, 3.
Rednal House Estate.
I beg to refer to your letter of the 9th instant, giving further information respecting your housing developments on the above Estate, from which it is observed that the position has again altered in respect of the 111 houses in course of erection, and that such houses will belong to Excelda Housing Supplies Ltd.
My Committee now direct me to state that in respect of the 111 houses above mentioned the Bank will be prepared to consider granting advances to Excelda Housing Supplies Ltd. when the said houses are completed and ready for occupation, any such advances to be subject to the leases and counterpart leases being deposited with the Bank as collateral security until the loan is reduced to a figure equal to 75% of the valuation, and subject further to your personal guarantee in respect of repayments in accordance with the mortgage. No objection would be raised to the mortgages being in respect of blocks of 24 houses. The extent of the advance would depend upon the report and valuation of our Valuer upon the particular block of 24 houses, and when the same are ready for his inspection and you notify me, I will instruct him accordingly, and then inform you of the amount which the Bank will advance and the terms.
With regard to the remaining 800 houses you contemplate erecting on this Estate, the mortgages of which would be with you alone, I have to say that my Committee do not view with favour the high proportion of two bedroom houses compared with three bedroom houses which applies to the 111 houses. I understood from Mr Lawley that the 111 houses would consist of 63 with two bedrooms and 48 with three bedrooms. My Committee are of opinion that, in respect of the 800 houses, there should not be more than 360 houses of the two bedroom type, and they would require your assurance on that point.
Assuming that such assurance is given, and on the understanding that the whole of the houses will be erected according to the improved specification arranged with our Valuer, my Committee direct me to say that the Bank will lend £324 on each house with three bedrooms and £301. 10. 0d. on each house with two bedrooms. Progressive mortgages would be arranged in respect of each block of 100 houses or thereabouts, and each advance would be on the certificate of the Bank's Valuer after his inspection of the work, and in accordance with the following scale:
20% when building is 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, and house ready for occupation.
Interest would be payable at the rate of 4½% per annum, and after the final advance has been made in respect of each block of 100 houses or thereabouts, the repayment of the mortgage would commence. The amount of the repayment would be a fixed monthly instalment of principal calculated to discharge the loan in a period of 30 years, plus interest at the rate of 4½%, calculated on the monthly balance outstanding.
In respect of the issue of all certificates by the Bank's Valuer, you would pay such fees as may be mutually agreed.
The mortgage deeds will be prepared by the Town Clerk in such form as he shall think necessary for the protection of the Corporation, and shall (inter alia) include a provision negativing the application of Section 93 of the Law of Property Act, 1925, relating to consolidation. The charge of the Town Clerk, as Solicitor to the Bank, for the preparation of the mortgages, to be paid by you in accordance with terms to be mutually agreed. All stamp duties will be payable by you, and if the land is affected by mineral rights and it is necessary to obtain the opinion of a mining engineer, the fees of such engineer will also be payable by you.
It is understood that all roads and sewers will be constructed to the requirements of the Local Authority and will be, eventually, taken over by the Local Authority.
With regard to the rate of interest, my Committee direct me to state that so long as payments under the mortgages are made on or before the appointed day each month, a rebate of ½% on the interest charge will be allowed.
This offer is made on the understanding that the erection of the houses will proceed forthwith; that each block will be completed within a period of six months from the date the mortgage is entered into, and that the whole scheme will be completed before the 30th September 1940.
This offer of advance remains open for your acceptance for 14 days, and the former offer made in my latter of the 2nd March is hereby withdrawn.
I shall be please to hear from you.
Yours faithfully,
J P HILTON
6514 RESOLVED:- That a revised offer be made to Mr Douglas D James in respect of houses to be erected on the Rednal Houe Estate, Northfield, in accordance with the draft letter referred to, also that the action taken in notifying Mr James that the Bank would not be prepared at the present time to make advances in respect of houses on the Manor Farm Estate, Kingstanding, be confirmed.
Bank Committee: June 19th 1939
6543 RESOLVED:- That authority be given for advances to be made to Mr Douglas Dyas James upon houses to be erected on the Rednal Green Estate on the terms and conditions indicated by Minute No 6514 and the letter from the General Manager to Mr Douglas Dyas James dated 16th May 1939; that the General Manager be instructed to take all necessary actions accordingly; and that the Town Clerk be generally instructed to prepare any necessary documents, affixing the Corporate Seal thereto where required.
The General Manager reported that he had received an application from Mr Douglas Dyas James for mortgage advances in respect of proposed housing developments at Sheldon, which would involve some 3,000 houses to be erected on four different plots of land. The Committee considered this matter should be fully discussed and it was accordingly:
6550 RESOLVED:- That a special meeting of the Committee be held at 11am on Wednesday the 21st instant, at the Council House, to consider the application, a report on the matter to be submitted by the General Manager; also that consideration be given at this meeting, if possible to the revised proposals for houses to be erected on the Factory Farm Estate, Streetly, in respect of which Mr E P Booth had made an application.