NINO STAFFA up loans » are slightly higher than those for Building Society mortgages and only people with very high incomes can afford to make the payments on both these loans. Both the insurance companies and the societies benefit from this arrangement. The insurance companies also cooperate with the societies to enable them to grant 100% mortgages in certain cases and the level of organisation is a very sophisticated one. « The Building Society Indemnity Scheme: This scheme is one agreed between the Building Societies Association (BSA) and the Building Societies Indemnity Committee which comprises 15 insurance companies who are members of the British Insurance Association (BIA). It involves insurance of the "top slice" (i.e. that part of the loan which is greater than the loan which the society would normally make) of building society loans. Under the scheme the insured advance may not exceed 100% of the value of the mortgaged property and the "top slice" may not be more percentages apply above this)» (48). There is also a scheme which involves the Civil Service, the BSA and the BIA. The « Option Mortgage Guarantee » scheme is a scheme which has been agreed between the Department of the Environment (DoE), the BSA and the BIA. It is available for « option mortgages » given by societies on properties valued under £ 14,000. Under this scheme the Government and the insurance companies share the risk of up to 25% of the value of the property for loans up to 100% of the valuation. Furthermore, the Government takes on its share of the risk at no charge. The banks' main activity in the « housing market» is now in the provision of bridging loans (i.e. when a house owner wishes to move to another property which costs more than the selling price of the owners present home, he/she will seek a loan to« bridge» the gap). In the« boom period» 1972-73the banks did offer mortgages but they carried higher interest rates and shorter repayment periods. Both the banks and the insurance companies are mostly concerned with the wealthier part of the « housing market». They do not, however, actively seek housing loan business and are happy to leave the major part of this kind of activity to the building societies. Local authorities also provide housing finance. The Small (48) HMSO op. cit., part. II, p. 97. 30
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