The UK is suffering from a housing crisis and immediate action is required. Right now councils are housing 77,000 families and 125,000 homeless children in temporary accommodation, with a further million on waiting lists. The last time the country built enough homes councils built 40 per cent of them. We urgently need a renaissance in council house building.
We welcome this set of proposals for greater flexibility on the use of Right to Buy (RtB) receipts and the recognition of the challenges councils face in replacing homes sold under the RtB. The recent announcement to lift the Housing Revenue Account Borrowing cap provides a real opportunity for councils to build more homes, which can be more fully realised with further reforms to the RtB. The Government must move quickly to implement a total lifting of the HRA cap so that councils can begin to build homes.
The LGA has long argued for reform of the rigid restrictions on the use of RtB receipts. Recent research for the LGA by Savills revealed that two thirds of councils will have no chance of replacing homes sold off under RtB on a one-for-one basis in five years’ time unless a significant restructuring of the scheme takes place.
However proposals do not go far enough in realising the potential and aspirations of local government. In particular, it must allow all councils maximum opportunity to build housing. It is disappointing that accessibility to social rent grant and proposed RtB flexibilities are restricted to areas defined by such a narrow definition of affordability. The decision prevents countless councils ready to build now, and it prevents the half a million families on council waiting lists in those areas from benefitting.
All councils need freedom and certainty to find create solutions to their individual housing challenges, and they – like the private sector and housing association sector – need a stable policy and financial environment in which they can be confident in making long term investment in new and existing housing.