In the Financial Year 1936/37, the amount outstanding on the Bank's House Purchase Advances was substantially increased by the taking-over
of a number of loans that had originally been made by Solihull Urban District Council under the Small Dwellings Acquisition Act. The
number and value of these mortgages was reported by the Birmingham Mail of January 12th 1937 (reproduced below) as 453 amounting to
£173,751. Alternative sources give the figures as 466 and £178,145.
At Solihull Urban District
Council offices, this morning, a cheque for £173,751 was handed to Mr G H Budd, accountant to the Council, by Mr J P Hilton, general
manager of Birmingham Municipal Bank.
A short time ago negotiations took place between the Council and the bank with a view to
the latter taking over the mortgages which had been effected from time to time with the Council under the Small Dwellings Acquisition
Act. The borrowers were under contract to pay interest at rates varying from 5 per cent to 5½ per cent, and in view of the general
reduction in mortgage interest rates it was felt desirable to find an avenue whereby the borrowers could have the benefit of lower
interest rates. Birmingham Municipal Bank having obtained Parliamentary powers to effect transfers of mortgages, it was eventually
arranged that the transfers should take place by this means, and the borrowers would then have their interest charge reduced to 4½
per cent, which is the rate in force in the bank. Four hundred and fifty-three mortgages were involved, and the transfer has now been
Explaining the transfer from the point of view of Solihull Council, Mr Budd said that the advances made by
the Council under the provision of the Small Dwellings Acquisition Act for the purposes of house purchase had been a matter of some
concern to the Council, particularly having regard to the reduction in the general rates of interest which had taken place over the
last few years. The Council had obtained the money for these advances from the Public Works Loans Board, and they had been unable
to obtain any concessions from this body on the rate of interest payable on these loans.
The rate at which the advances had been
made to persons desiring to purchase their houses under the provisions of the Small Dwellings Acquisition Act was fixed by the Ministry
of Health, and normally was at a quarter per cent in excess of the rate charged to the Council for the loans. As the Council had been
unable to obtain a reduction in this rate of interest, they had naturally not been able to pass on any concession to the borrowers,
and this transfer which had taken place with Birmingham Municipal Bank had been evolved primarily for the purpose of passing on some
benefit to the mortgagors.
The vice-chairman of Solihull Council, Mr R J Turner, and the chairman of the Finance Committee, Mr
Ambrose Hopper, had taken a very great interest in this matter, and had been particularly anxious that a scheme of this nature should
be carried through and that the interests of the mortgagors should be fully safeguarded.
The Council felt satisfied that the
treatment which would be extended by the bank to mortgagors who, through unemployment or other unfortunate circumstances, might at
some future time find difficulty in meeting the instalments, would be on similar terms to the treatment which had been extended to
them by Solihull Council.
Mr Budd, on behalf of the Council, expressed his appreciation of the assistance which had been afforded
to him in the negotiations in connection with the transfer by Mr Hilton.
Others present were Mr G W Hill (representing Birmingham
Town Clerk’s Department) and Mr C H Cook, Clerk to Solihull Council.
The expenses in connection with the transfer have been borne
by the Birmingham Municipal Bank, without any cost to the borrowers.