William Eichler 20 March 2025

Overstretched finances threaten 1.5m housebuilding target

Overstretched finances threaten 1.5m housebuilding target image
Image: Jevanto Productions / Shutterstock.com.

The pressure on social housing finances at the local level could undermine the Government’s ambition to build 1.5 million houses this parliament, council chiefs warn.

A Local Government Association (LGA) survey looking at the financial stability of Housing Revenue Accounts (HRAs) revealed that 72% of all respondent councils with an HRA are 'very' or 'fairly' likely to draw down on reserves to balance budgets for 2025/26.

All of the survey respondents said they would likely increase council housing rents with 67% also expecting to reduce real terms spending on supervision and management, and 57% on repairs and maintenance.

While the Government is consulting on a long-term rent settlement for the sector and is offering CPI+1% over five years, only 38% were confident that this would allow them to invest in planned new build programmes.

The survey also found that only 61% of respondents said that they were ‘very’ or ‘fairly’ confident that this settlement would allow then to balance their budgets.

The LGA is calling on the Government to use the Spending Review to restore over £600m in lost revenue due to the rent cap in 2024/25 and to provide a long-term rent settlement that supports financial stability for HRAs.

It added that without immediate support local authorities would struggle to finance new affordable homes, undermining the Government’s plans to build 1.5 million homes over the next five years.

SIGN UP
For your free daily news bulletin
Highways jobs

Director of Environmental & Commercial Services

Reading Borough Council
Up to £109k
If you are considering your next career move, look no further than Reading BC. Reading, Berkshire
Recuriter: Reading Borough Council

Infection Prevention & Control Nurse/Practitioner

Wakefield Council
£38,682.00 - £46,580.00, 23NHS 2021 B6, 37.5 hours, Permanent
This is an exciting opportunity for a candidate to take their interest in IPC to the next level Wakefield, West Yorkshire
Recuriter: Wakefield Council

Adults Social Worker - Neighbourhood Team

Essex County Council
£37185 - £50081 per annum + Flexible Working, Hybrid Working
This is a fixed term contract or secondment opportunity to 31st December 2026.We're an adult social care service that wants to see citizens of Essex England, Essex, Clacton-On-Sea
Recuriter: Essex County Council

Peripatetic Support Assistant

Wakefield Council
£12,791.50 - £12,994.50, Grade 4, 18.5 hours, Permanent
Are you caring, compassionate, and friendly? Wakefield, West Yorkshire
Recuriter: Wakefield Council

Care Home- Shift lead (Obelisk)

West Northamptonshire Council
£28,716
We have an opportunity within Obelisk House, which provides exceptional levels of support to older persons living with Dementia, Physical disabilities or /and Sensory impairments. Situated in a residential suburb in Northampton, offering a wonderful livi Northampton
Recuriter: West Northamptonshire Council
Linkedin Banner