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A Welcome Boost to the Social Housing Sector

A Welcome Boost to the Social Housing Sector

James Shelley assesses what impact the government’s pledge to free up funds to build more council houses will have on the housing shortage.


The government’s decision to change borrowing rules to allow local authorities to play a key role in homebuilding is welcome news.


For many years councils have been calling for the removal of the cap on the amount they are permitted to borrow against their Housing Revenue Account assets. Now, they will be able to use revenue raised from their existing social housing stock to invest in new homes.


The last time the UK was building enough new houses was in the 1970s, when councils were responsible for around 10,000 new homes – 40% of stock – per annum. Since then, a limit on borrowings has seen this figure drop to as low as 100 homes.


Resolving the housing crisis has been described as ‘the biggest domestic policy change of our generation’ and, having already opened up the £9 billion Affordable Housing Programme to councils, to help ramp up homebuilding, this move to unlock another funding stream has been widely welcomed.


Depending on the number of councils that choose to borrow, the amount of extra investment in housing could be around £1 billion a year. Scrapping the cap shows that the government is serious about the role councils can play and should contribute towards resolving the housing crisis.


Ultimately, there is no easy fix and this initiative is another piece of the jigsaw which will not, of itself, slash the shortage of homes at a stroke. Indeed, simply building more houses is not the answer. What we need are quality, affordable homes, built to stand the test of time in places people want to live. To make a difference, it’s essential to create communities, which means locating council houses close to amenities, especially schools, and ensuring they are well-served by public transport.


Having the funds to build is important but, given the scale of the issue, we must also consider how to build. This means speeding up the delivery process without compromising on quality and could involve planning revisions to promote the advantages of modular and offsite solutions.


The government’s target of 300,000 new homes a year is a tall order, but the decision to free up funding so that councils can once again take a lead in residential development should deliver a significant boost to the social housing sector.

Download Vision November 2018 …