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

Cleaner and Caretaker

North Yorkshire Council
£12.65 - £13.47 per hour
Are you looking for a cleaning role that is a little different? Ripon, North Yorkshire
Recuriter: North Yorkshire Council

Cleaner and Caretaker

North Yorkshire Council
£12.65 - £13.47 per hour
Are you looking for a cleaning role that is a little different? Bradley, West Yorkshire
Recuriter: North Yorkshire Council

Specialist Customer Service Officer

Oxfordshire County Council
£31,537 - £34,434 per annum
Are you passionate about helping others and making a real impact in your community? We’re looking for Specialist Customer Service Officers to join our dynamic Contact Centre team, the first point of contact for a wide range of essential services acros Oxfordshire County Council , County Hall, Oxford
Recuriter: Oxfordshire County Council

Cook

North Yorkshire Council
£13.47 - £14.13 per hour
Are you keen to join a friendly team who are committed to making a real impact in their local community? Lancaster, Lancashire
Recuriter: North Yorkshire Council

Catering Assistant

North Yorkshire Council
£12.65 - £12.65 per hour
We have an opportunity to join our award-winning Facilities Management catering team. North Yorkshire
Recuriter: North Yorkshire Council
Linkedin Banner