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.

What’s happening inside the LGPS? image

What’s happening inside the LGPS?

Get the most informed take on the challenges and opportunities that substantial reform will bring at this year’s PLSA Local Authority Conference.
SIGN UP
For your free daily news bulletin
Highways jobs

Director of Public Health

North Tyneside Metropolitan Borough Council
£105,467 pa
North Tyneside has ambitious plans for the people and places across the borough. North Tyneside, Tyne and Wear / Any Location
Recuriter: North Tyneside Metropolitan Borough Council

Principal Licensing Officer

Bromsgrove and Redditch Councils
£43,693 - £46,731 (Grade 9)
Worcestershire Regulatory Services (WRS) are recruiting to the post of Principal Licensing officer. Bromsgrove, Worcestershire
Recuriter: Bromsgrove and Redditch Councils

Employment Vetting Officer

Essex County Council
£26090.00 - £30693.00 per annum + pension
Employment Vetting OfficerFixed Term, Full Time£26,090 to £30,693 per annumLocation
Recuriter: Essex County Council

Quality Improvement Officer

Royal Borough of Greenwich
£34,416 - £35,448
Your primary role will be to provide administrative support to frontline staff. Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Senior Support Worker

Sandwell Metropolitan Borough Council
Band D, SCP9 - 17 (£26,409 - £30,060) per annum
We have an exciting opportunity to join a bespoke service within adult services. Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council
Linkedin Banner