Government urged to remove borrowing cap so councils can build new homes

Government has set caps on what each council can borrow to invest in new homes, with at least nine councils unable to borrow anything at all. Between them these areas have about 40,000 households on social housing waiting lists. Nationally there are 1.8 million households on waiting lists for social housing.
 
The Local Government Association, which represents councils in England and Wales, is urging the Chancellor to use this week's Autumn Statement to lift the housing borrowing cap and allow councils to invest in housing under normal responsible borrowing guidelines.
 
Up to 60,000 additional new homes could be built over the next five years if government lifted the cap. Market analysis has shown that the investment would be very low-risk and paid many times over by future rents on new homes.

Cllr Mike Jones, Chairman of the LGA's Environment and Housing Board, said:

“There are millions of people on social housing waiting lists and councils want to get on with the job of building the new homes that people in their areas desperately need. Local authorities have excellent credit ratings and we want to use our assets to help kickstart the housing recovery but our hands are being tied. The Chancellor has an unrivalled opportunity to use this Autumn Statement to create jobs, provide tens of thousands of homes and help the economy without having to find a single extra penny.
 
New homes are badly-needed and councils want to get on with building them. The common sense answer is for the Treasury to remove its house building block and let us get on with it. Councils could build up to 60,000 additional new homes over the next five years if the Treasury removed the housing borrowing cap and allowed councils to invest against normal borrowing guidelines."