On the final day of the Conservative Party Conference the prime minister announced that the cap on local authority borrowing is to be scrapped which will bring a boost to housebuilding. The cap on borrowing was identified by the prime minister as “still holding many of them back” despite a number of existing initiatives aimed at helping local authorities to contribute to the housing supply.
As highlighted by Lord Porter, chairman of the Local Government Association (LGA) it was only in the 1970s where council were building more than 40% of housing that “this country built homes at the scale we need now”.
The CEO at Shelter, Polly Neate, indicated that with the scrapping of the cap 27,500 new social homes could be built each year which is in stark contrast to the 5,000 social homes built last year in total.
A week earlier at the Labour Party Conference Jeremy Corbyn announced that they would remove the artificial local borrowing cap which would enable local authorities to borrow against their housing stock which “would allow them to build an extra 12,000 council homes a year”.