Speaking in her keynote speech on the final day of the Conservative Party Conference, Theresa May called it “the biggest domestic policy challenge of our generation”. No, this was not a reference to Brexit or how to fund the NHS. She was referring to the problem of stimulating housebuilding, before announcing that the government is scrapping the cap on local authority borrowing to fund new housing development.
Speaking of the government’s existing initiatives to help local authorities do their bit to increase housing supply, she admitted that “something is still holding many of them back”, and that “it doesn’t make sense to stop councils from playing their part.”
The announcement was quickly endorsed by many including Lord Porter, chairman of the Local Government Association (LGA), who said: “It is fantastic that the government has accepted our long-standing call to scrap the housing borrowing cap”
“The last time this country built homes at the scale that we need now was in the 1970s, when councils built more than 40 per cent of them. Councils were trusted to get on and build homes that their communities needed, and they delivered, and it is great that they are being given the chance to do so again.”
The RTPI’s policy officer, Tom Kenny, said that this change will be vital to tackling the housing crisis – “The prime minister’s move to scrap the HRA borrowing cap is warmly welcomed and needs to be rolled out immediately – our members have been calling out for this for some time.
“We also need to give councils more powers to assemble sites with the infrastructure needed to support them, with land at the right price to build more homes, quicker, either themselves or via a diverse set of housebuilders including housing associations, self-builders and SMEs.”
Polly Neate, CEO at Shelter, said that the change could see up to 27,500 new social homes built each year. "For comparison, only just over 5,000 social homes were built last year in total. Scrapping the borrowing cap lays down the gauntlet to local authorities to bring forward homebuilding plans – no more excuses.”
However, there were some dissenting voices amongst the chorus of approval. Anthony Breach, Analyst at Centre for Cities, said “while this might increase the rate of building and especially benefit those on low incomes, it doesn’t solve the key problem in our most high-demand cities – a shortage of land in the planning system that can be developed.” He also pointed out that there must be the polticial will for it to happen: “Different places have distinct politics and views, and simply giving local government the freedom to build more houses is no guarantee they actually will. The current existence and structure of Right to Buy also discourages councils from building, yet so far it remains untouched.”
© 2017 Planning and Design Practice Ltd. All rights reserved.
Website by Frogspark