Social media is buzzing after Theresa May made housing the final talking point at the end of her speech at the Conservative Party conference.
Prime Minister May announced that her Government will abandon the cap on borrowing which, for five decades, has held back local authorities building the much needed affordable homes within their communities.
This important step will see councils enter a new era of building affordable, sustainable council houses across the country.
Theresa May said: “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.
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; however 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.
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.”
The announcement aroused more reaction on Twitter than Brexit, with housing commentators calling the news ‘exciting and significant.’
Chairman of the Local Government Association, Lord Porter said: “We warmly welcome the move. 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: “The Prime Minster has taken a large and very positive step.
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.
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.”