Real Estate Blog: The renaissance of council housebuilding: the LGA sets out its six-point plan

To mark the end of his four-year term as the Chairman of the Local Government Association (LGA), Councillor James Jamieson sets out a six-point plan which calls on the Government to do more with a view to councils being able to properly resume their historic role as major builders of affordable homes across England.

The six-point plan:

  1. Roll-out five-year local housing deals to all areas of the country that want them by 2025 and combine funding from multiple national housing programmes into a single pot, providing the funding, flexibility, certainty and confidence to stimulate housing supply, and will remove national restrictions which obstruct innovation and delivery.
  2. Government support to set up a new national council housebuilding delivery taskforce, bringing together a team of experts to provide much-needed additional capacity to council resources and improvement support for housing delivery teams within councils and their partners.
  3. Continued access to preferential borrowing rates through the Public Works Loans Board (PWLB), introduced in the Spring Budget, to support the delivery of social housing and local authorities borrowing for Housing Revenue Accounts.
  4. Further reform to Right to Buy: allowing councils to retain 100% of receipts on a permanent basis; flexibility to combine Right to Buy receipts with other government grants; the ability to set the size of discounts locally; and the ability to recycle a greater proportion of receipts into building replacement homes paying off housing debt.
  5. Reviewing and increasing the grant levels per home through the Affordable Homes Programme, as inflationary pressures have caused the cost of building new homes to rise, leaving councils needing grant funding to fund a larger proportion of new build homes than before.
  6. Certainty on future rents, helping councils to invest. Government must commit to a minimum 10-year rent deal for council landlords to allow a longer period of annual rent increases and long-term certainty.

Cllr Jamieson, said:

“Housing is too often unavailable, unaffordable, and is not appropriate for everyone that needs it. The right homes in the right areas can have significant wider benefits for people and communities, and prevent future public service challenges and costs.“Addressing the chronic housing shortage must be a national priority. Our six-point plan would lead to a generational step-change in council housebuilding and give local government the powers and funding to deliver thousands of social homes a year– at scale, and fast.“A genuine renaissance in council housebuilding would unlock local government’s historic role as a major builder of affordable homes, which support strong and healthy communities and help to build prosperous places.”

Off the back of the Pandemic and with interest rates and inflation through the roof, there are currently 1.2 million people on the councils’ waiting lists and over 100,000 in temporary accommodation. National housebuilding is naturally only going to slow down in such a volatile economy, so the number of people on the waiting lists are only going to increase.

The Government would be wise to take heed of Cllr’s Jamieson’s six-point plan: surely it is time to empower local government to deliver social housing across England, alongside Housing Associations. Only with this dual approach will we be able to deal with the persistent problem of a lack of truly affordable housing.

Please get in touch with author Kim Stone or Sarah Rowe in our Social Housing Team to discuss anything covered in this blog.

If you would like any advice on procurement, joint ventures and novel contracting structures, please get in touch with Local Government Partners, Stephen Pearson and Nathan Holden.

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