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

Children’s Social Worker

Cheshire East Council
£39,000 - £41,771 per annum
As a Children's Social Worker, you'll work directly with children, families and partner agencies to safeguard children, promote their wellbeing Cheshire
Recuriter: Cheshire East Council

School Crossing Patrol

North Yorkshire Council
£13.28 - £13.92 per hour
Duty times
Recuriter: North Yorkshire Council

Travel Trainer (Ealing)

Essex County Council
£25959.0000 - £28621.0000 per annum
Travel Trainer (Ealing)Permanent, Full Time£25,959 up to £28,621 per annumLocation
Recuriter: Essex County Council

Loader

North Yorkshire Council
£25,614 - £26,847
To work as a team to ensure services are completed and responsive to external factors – breakdowns, blockages etc. Skipton, North Yorkshire
Recuriter: North Yorkshire Council

Natural Health Engagement Officer

North Yorkshire Council
£29,064 - £31,537 per annum, pro rata
As Natural Health Engagement Officer, you will help deliver a range of health and wellbeing programmes that encourage people of all ages Pateley Bridge, Harrogate
Recuriter: North Yorkshire Council
Linkedin Banner