LGA says councils will borrow to boost housebuilding

94% of housing stock-owning councils say they will use new powers to build “desperately needed” homes.

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New powers to borrow and invest in new and existing housing look set to be used by most councils, but further reforms are needed to spark a genuine renaissance of social housing, a survey by the LGA reveals.

The survey further revealed 94% of housing stock-owning councils said they will use the new powers to accelerate or increase their homebuilding programmes to build homes in their communities.

According to reports, the number of homes built for social rent each year has fallen from over 40,000 in 1997 to 6,000 in 2017.

The LGA said this decline has resulted from the policies of successive governments, such as rules and restrictions hampering the ability of councils borrowing to build.

This loss of social housing is said to have led to more and more individuals and families finding themselves pushed into an often more expensive and less secure private rented sector.

As a result, the housing benefit bill paid to private landlords has more than doubled since the early 2000s.

The survey also revealed that:

• Reform of Right To Buy (RTB) is needed, with responding councils calling for the power to retain 100% of RTB receipts and set discounts locally

• 97% said more national advice and guidance is needed, while others saw homelessness as a key driver behind building more homes, with 81% of respondents saying additional future housing supply would help address homelessness in their area

• The growing national and local skills gap was also a cause for concern, with councils’ ability to reskill and upskill crucial to accelerating their homebuilding plans

The LGA has further stated the government needs to reform Right To Buy to ensure councils can replace every home sold, as well as setting out sustainable long-term funding and commitment to social housing in the Spending Review.

LGA housing spokesperson Cllr Judith Blake said: “By lifting the cap on councils being able to borrow to invest in new and existing housing, the government has showed it has heard our argument that councils must be part of the solution to the chronic housing shortage.

“Our survey shows that councils up and down the country want to build more good quality, affordable homes that meet the strategic housing needs of their local communities.”

She added: “The last time the country built more than 250,000 homes in a year, in the 1970s, councils built around 40% of them. A genuine renaissance in council housebuilding is the only way to boost housing supply, help families struggling to meet housing costs, provide good quality homes to rent, reduce homelessness, and tackle the housing waiting lists many councils have.

“Councils now also need to be able to keep 100% of Right To Buy receipts and set discounts locally to ensure they can replace any homes sold.”

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