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

Procurement & Contracts Officer - Epping Council

Essex County Council
Up to £21.0100 per hour
Procurement & Contracts Officer - Epping Forest District Council Epping, EssexFull-Time, Temporary - 37 Hours per Week 2-3 Month Contract £21.01 PAYE England, Essex
Recuriter: Essex County Council

Commercial and Operations Manager

Mansfield District Council
£12,098 - £13,756 per annum
This is a part-time opportunity, working alongside a part-time fellow manager of the same title. Mansfield, Nottinghamshire
Recuriter: Mansfield District Council

Plumber/Gas Fitter

Mansfield District Council
£32,373, per annum plus £484 tool allowance
We have an exciting opportunity to join our Housing Repairs Team Mansfield, Nottinghamshire
Recuriter: Mansfield District Council

Highway Asset Manager (Contracts)

Devon County Council
£58,310 per annum
Are you experienced in delivering large-scale infrastructure programmes that keep communities connected and safe? Devon
Recuriter: Devon County Council

Senior Care and Housing Support Officer

Sandwell Metropolitan Borough Council
Band D, SCP 9 -17 (£27,254 - £31,022 per annum)
Are you enthusiastic about making a difference in the lives of older adults? Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council
Linkedin Banner