counts for the growth of the mortgage credit market.
The Government stimulates the purchase of houses for owner-
occupation in many ways, to that such income brackets that could
not take the step towards a house of their own in the past can now
cross the threshold.
This development, however, is also attended with risks: Many people
start from the assumption that on selling the house they will, in
terms of real purchasing power, always get a higher price. Now that
the growth of our economy is levelling off and private spendable
income is being worn away, this will, we think, be bound to have
an adverse effect on the soaring prices of houses. If this should be
the case, those who will suffer will be those groups who cannot
afford to leave their houses unoccupied on moving out or have to be
satisfied with a lower selling price. The private home may then
become a drag on labour mobility, for which we shall have to leave
scope for the sake of optimum employment.
Already now the stimulation of house-building for owner-occupation
has given rise to problems among the financially weakest category.
Many of these problems - we have in mind especially the municipal
guarantee regulations - can be avoided if the Government, before
issuing its measures, consults with private industry, which has been
engaged professionally in the financing of real estate for many
years.
At the same time, the finance institutions, which in their efforts to
grab as big a share in the market for residential mortgages as possible
seem to outbid each other in granting credit, should also be aware of
their social responsibility. Especially those types of mortgage where
the annual burden to the debtor rises considerably during a certain
period of time, we do not consider justified in the majority of cases,
as they anticipate a continuing growth in income.
In the sector of industrial mortgage credit there was a brisk demand
in 1976 as well.
In a time of progressive inflation and, on the whole, a fairly un
profitable industry the real net worth is being used up and self
financing is only possible to a very limited degree. Under these
conditions the mortgage financing, where the lender primarily finds
his security in the mortgaged real estate, is an attractive possibility
of attracting loan capital.
In a time of growing competition in the mortgage credit market we
have, as it were, gradually shifted the stress from ready-made to
made-to-measure mortgages. In this way we think we shall be able
to employ the know-how present in our company in the best manner