Secretary of State for Housing, Communities and Local Government, James Brokenshire, has this week announced plans to lift the Housing Revenue Account (HRA) borrowing cap by £1bn to permit a new generation of council housing.
Around 23,000 new affordable homes will be delivered through a £1.67 billion government investment deal. This will include at least 12,500 social rent homes in high cost areas in a move to support families struggling to pay their rent.
This is part of the government’s £9 billion investment in affordable homes, £1.67 billion of which was announced in March 2018 for London. This latest funding will deliver homes across the rest of the country.
The Communities Secretary also heralded a new generation of council housing by inviting local authorities to bid for a share of £1 billion extra borrowing to build much-needed homes. This £1 billion borrowing cap raise will be split equally between London and the rest of England.
The Rt. Hon James Brokenshire MP, Secretary of State for Communities, said:
“The government has ambitious plans to fix the broken housing market and build the homes our communities need. Today’s announcement is a further milestone. It will secure the delivery of an additional 23,000 much-needed affordable homes as well as paving the way for a new generation of council houses.
“The majority of these new homes will be in high cost areas helping to ease the burden of rent on hard working families and delivering stronger communities.”
Localis interim chief executive, Jonathan Werran, said:
“The securing from the Treasury of this measure of extra financial flexibility – to areas of the country with the highest housing costs and affordability pressures – is a significant win for local government as it seeks to champion a beefed-up role for the sector in helping fix the national housing crisis.
“The reality of the situation remains challenging. Last year just 1,490 homes were started by local authorities – suggesting the majority of local government is not set up for the large-scale construction of housing anymore.
“In context, an extra 12,500 more council homes built per year would mean the sector uprating its output very considerably.
“This announcement is a positive step forwards to engendering the kind of mixed economy which worked well enough in the years following Harold Macmillan’s successful tenure as housing secretary, when state and private builders didn’t crowd each other out as much as mutually reinforce each other’s ambitions.
“If government wants a new generation of new council homes it must continue down the track of empowering, resourcing and directing local authorities accordingly.”