Paul Marinko 07 January 2020

Councils still being held back from building more homes finds report

Local authorities are still being held back from providing more homes, a new report examining the future for council housing has argued.

The report by the Chartered Institute of Housing (CIH), National Federation of Arms-Length Management Organisations and the Association of Retained Council Housing (ARCH) found that while councils were on course to build 10,000 homes a year much more could be achieved if ‘significant constraints’ were removed.

Among the barriers identified by councils surveyed were the requirement to allow tenants to buy their homes at a significant discount and restrictions on how this money could be used.

The Right to Buy policy was cited as a major disincentive to building because new homes might have to be sold after only three years and possibly at less than the cost of building them.

Other blockers were the capacity of the building industry to deliver enough homes for councils and planning constraints.

Chief executive of the CIH, Gavin Smart, said: ‘This report shows that councils are stepping up to the challenge of building more homes and with more help they can make a significant contribution to ending our housing shortage, but a combination of factors is stopping them.

‘If the Government wants councils to play their full part it needs to give councils the flexibility they need to really get building the homes their communities need.’

ARCH chief executive, John Bibby, added: ‘Government should be applauded for the decision in the Autumn 2018 Budget to lift the HRA [Housing Revenue Account] borrowing cap and this report clearly shows that this decision has enabled councils to begin to provide many more affordable rented homes for local people, but more can and should be done.’

A spokesman for the Ministry of Housing, Communities and Local Government said: 'It’s great news that councils are saying they’re on track to exceed 10,000 new council homes a year – this progress means real houses being delivered for the people and families who need them.

'It comes just over a year after we abolished the borrowing cap which gave them the financial room needed to build, but we are committed to working with councils and exploring ways of unblocking their ability to build even further.'

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