A whole new wave of council house building is in sight after Theresa May said that the Government will scrap the cap on how much local authorities can borrow to get building again.
May used the end of her speech at the Conservative Party conference to outline plans to get councils involved in house building.
The announcement has caused a huge stir on Twitter, with housing commentators describing the announcement as significant and exciting – and far more so than the major part of the speech which concentrated on Brexit.
She said: “The last time Britain was building enough homes – half a century ago – local councils made a big contribution.
“We’ve opened up the £9bn Affordable Housing Programme to councils, to get them building again.
“At last year’s conference I announced an additional £2bn for affordable housing. But something is still holding many of them back.
“There is a government cap on how much they can borrow against their Housing Revenue Account assets to fund new developments.
“Solving the housing crisis is the biggest domestic policy challenge of our generation.
“It doesn’t make sense to stop councils from playing their part in solving it.
“So, I can announce that we are scrapping that cap. We will help you get on the housing ladder. And we will build the homes this country needs.”
Lord Porter, chairman of the Local Government Association, warmly welcomed the move.
He said: “It is fantastic that the Government has accepted our long-standing call to scrap the housing borrowing cap.
“We look forward to working with councils and the Government to build those good-quality affordable new homes and infrastructure that everyone in our communities need.
“Our national housing shortage is one of the most pressing issues we face and it is clear that only an increase of all types of housing – including those for affordable or social rent – will solve the housing crisis.
“The last time this country built homes at the scale that we need now was in the 1970s when councils built more than 40% 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.”
Hew Edgar, head of policy for RICS, said that the Prime Minster had taken a “large, and very positive, step”.
He said: “The RICS has long called for councils to be alleviated from the restrictive borrowing cap, and this policy will allow them to re-establish themselves as genuine players in housing again.
“Indeed, 40 years ago, local councils built 40% of all new homes, but for too long, councils have been limited in their capacity to make this significant contribution.
“We will monitor the outcomes of this policy closely in the hope this will genuinely bring in a new era of well-built affordable council homes, delivered at scale, across the UK.”
This isnt about building enough houses, that wont happen, its about securing the votes of those that currently vote Labour, and then blaming local councils when it all goes wrong
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We have loads of council houses in this country being blocked by well paid people. Just look at the late Rail Union leader Bob Crow. He was on £150k a year and refused to give up his council house for someone in need (true Socialism at play there). Council houses should be means tested every three years and if you earn over a certain amount you get one years notice. What do you think?
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And which party was it whose short-termist, vote-grabbing, stupidity in selling off council houses caused this problem in the first place?
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And which parties reversed that policy whilst in govt.
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A huge step in the right direction IMO.
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Means testing council home tenants is Big Brother at its best. The vast majority of council home occupiers are poor people on very low incomes, most of whom aspire to home ownership but haven’t a hope of ever getting there. There’ll always be a very small minority like Bob Crow, but if they are paying their rent and council tax and want to stay in the communities where all their friends and contacts are, so what? It leaves one more house in the private sector for sale.
The Macmillan government in the 1950s and early 1960s saw the most effective council house building programme ever. Basic but comfortable homes – the ubiquitous council house semi which now fetches hundreds of thousands of pounds in villages all over England and Wales – and there was a healthy balance with the rental supply keeping private property at realistic capital values and allowing first time buyers, and the many council house tenants looking to climb onto the property ladder able to afford to move on. The answer has to be new council homes for rent with no right to buy balancing supply and demand with the private sector.
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Because the people who need a council house, usually “poor people on very low incomes, most of whom aspire to home ownership but haven’t a hope of ever getting there” as you stated, will not be able to afford to buy a house, especially not one that someone earning £150k would purchase.
Potentially, having a sliding scale of rent may be a better plan. Wasn’t there something about 30% of income being spent on rent yesterday? Ok, as it’s council housing, do it at 25%. Every year you have to send in your P60 to show what you have earned, or you benefits award letter or whatever, and that gives the basis of your rent for the next 12 months, 25% of what you earned. If you earn above x amount, or you don’t send in you documents, you pay full market rent.
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There are a lot of very nice cars on a council estate. Why should people on high salaries be subsidised by everyone else? Child Benefit is removed once the household earns £65k so it should be similar to that.
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IF this happens, if, then I think this will be good. At the moment, council housing lists are so long that they are advising Tenants who have been served notice, to remain in the property until the Landlord and Agent takes them to court. This loads extra costs on to everyone, the Landlord has to pay initially, the Tenant can live there rent free, the Court and Bailiffs have to be appointed, and then the Tenant gets slapped (somewhat unfairly) with the cost of the whole thing, as well as any outstanding rent. All because the Councils do not have enough houses.
For the original Help To Buy, you had to be registered with the council and on the waiting list. I registered with the ‘man’ I was with and started the process. I realised it was a bad relationship and left him. Around 2 years later, we looked to buy, again with Help to Buy, and I tootled back to the Council, to discover I was still on the list, and had been for 2 years, without a sniff of contact of being eligible for a property… And this was just before it all went bang in 2008!
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“At the momement”………. its been going on for at least the last 25 years.
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Nothing wrong with council funded house building just as long as the deliberately work shy don’t walk straight into new homes, set up up hot tubs and barbecue’s on the front garden and get pissed all day at our expense!
Also, the contracts the councils issue to build and maintain these homes need to be vetted by central government, or an independent body to prevent some of the old boy’s network greasing palms. We’ve all seen 5 men watching 1 man dig a hole, but seldom do we think that we are paying for it!
The PRS must not be squeezed out either. Many people choose to rent but do not want to live on what will become nothing more than the modern council estate. Particularly since many hardworking families lost their jobs, businesses or homes due to the greed of the banks in the first place.
A sensible approach to housing is needed which caters for all, not just life’s freeloaders!
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Nothing wrong with council funded house building just as long as the deliberately work shy don’t walk straight into new homes, set up up hot tubs and barbecue’s on the front garden and get pissed all day at our expense!
Apols but the pedant in me just has to point out that such houses will not have front gardens. Otherwise fully agree.
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I’ve just taken possession of my rental in Bow, London and both 3 bed housing association houses either side are occupied by single women over 50yrs. Should’nt they now be moved to 1 bed flats?
Local authorities to borrow to build? CORRUPTION alarm bells ringing
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