The national housing shortage is one of the most pressing issues we face. The last time this country built more than 250,000 homes a year, councils built more than 40 per cent of them. Only an increase in all types of housing will ensure we can deliver 300,000 homes a year. A genuine renaissance in council housebuilding should play a major role in this.
Key messages
- The national housing shortage is one of the most pressing issues we face. The last time this country built more than 250,000 homes a year, councils built more than 40 per cent of them. Only an increase in all types of housing will ensure we can deliver 300,000 homes a year. A genuine renaissance in council housebuilding should play a major role in this.
- According to the Government’s latest statistics, new housing completions are increasing.ii This is positive. However, councils are responsible for a tiny proportion of the total completed. If we are to progress towards the national target, local authorities must be given the financial freedoms to build more council homes.
- The Housing Revenue Account (HRA) borrowing cap prevents councils from borrowing to invest in building new homes. The Government has taken a step forward by lifting the housing borrowing cap for some councils in ‘areas of high affordability pressure’, enabling them to bid for up to £1 billion in funding by 2021-22.
- The lifting of the housing borrowing cap for some councils in areas of the highest demand is a positive step, but it does not go far enough.iv We are calling on the Government to accept the call of councils and the Treasury Select Committee to lift the cap entirely for all areas. This will enable vital investment in new and existing homes.
- Councils should be allowed to use 100 per cent of receipts from Right to Buy sales to invest in new homes. Almost £3.5 billion in Right to Buy discounts has been handed out over the past six years, leading to a quadrupling in sales.v As councils are only permitted to retain a third of receipts, much-needed replacement homes for social rent have lagged far behind.
- A proactive, well-resourced planning system is vital to building the homes the country needs. Councils are working hard to deliver the right kind of homes, and are currently approving nine out of ten planning permissions. However, planning departments are severely under-resourced. Taxpayers are currently subsidising the costs of applications by around £200 million a year.
Download the full briefing
Debate on the construction of council housing - House of Commons - 27 March 2018