01:04PM, Monday 15 October 2018
The Government has lifted the borrowing cap on councils in a bid to deliver the affordable homes that Britain desperately needs.
The move, which will allow council borrowing to fund new developments, has been welcomed by town halls and housing experts, which have fought for the freedom for years to weaken the grip of big private developers.
In her conference speech on Wednesday last week, Prime Minister Theresa May said: “Solving the housing crisis is the biggest domestic policy challenge of our generation. It doesn’t make sense to stop councils from playing their part in solving it.”
The cap will be scrapped entirely, potentially leading to an extra £1bn borrowing and the building tens of thousands of new homes.
Brian Berry, chief executive of the Federation of Master Builders, welcomed the move, saying: “This is the most exciting, and potentially transformative, announcement on council housing for many years.
“It is something the house building sector and local authorities have been crying out for since the last economic downturn as a means by which to increase house building.
“Indeed, the only times the UK has built sufficient numbers of homes overall is when we’ve had a thriving council house building programme.
“Local authorities have a strong interest in delivering new affordable homes and many would have the appetite to directly fund this, but have been frustrated from doing so by an artificial cap on their ability to borrow against their assets to build homes.
“In a victory for common sense, Mrs May has now signalled that the borrowing cap will be scrapped to allow councils to build many more new homes.”
The Government also announced a raft of new housing measures at the conference, including, a New Homes Ombudsman to support buyers facing problems with their newly built home. The New Homes Ombudsman will back home buyers, protect their interests and hold developers to account.
Planning reforms have also been announced, including the flexibility to extend upwards and get rid of surplus land that could instead be used for new homes.