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Notes to the consolidated financial statements
Year ended 31 July 2007
21. Construction loans
| 2007 £m |
2006 £m |
|
|---|---|---|
| Construction loans receivable (secured) | 286 | 313 |
| Borrowings to finance construction loans (unsecured) | (286) | (313) |
| – | – |
Construction loans receivable, which are secured principally against homes in the course of construction or completed homes awaiting sale, are made to customers of Stock Building Supply Inc, and are all denominated in US dollars. These loans have an average maturity of nine months (2006: nine months). As at 31 July 2007, the effective rate of interest thereon was 9.89 per cent (2006: 8.85 per cent). The fair value of construction loans receivable and borrowings to finance construction loans approximates to book value.