The National Housing Federation has called on the government to lift the borrowing limits it has imposed on local authorities in the next Budget.
In a submission to the chancellor ahead of his Budget speech later this month, the NHF said the debt caps had ‘constrained’ the financial freedom councils had been given last year by the abolition of the housing revenue account subsidy system. It said this would ‘maximise local investment in new homes’.
Several organisations have made similar calls since the start of self-financing last March, with the Chartered Institute of Housing in its submission earlier this week suggesting government should raise the current £2.8 billion ceiling to £7 billion.
The NHF and CIH both told the chancellor that the government must confirm details of its rent-setting regime beyond 2015.
The NHF said the current index-linked formula should be extended beyond that date to help housing associations secure cheaper debt.
Its submission added: ‘It is also key to attracting a range of institutional investors into the sector, including pension funds, which is something the government views as critical.’
The NHF further urged the government to not cut benefits further, including housing benefit, until the impact of its welfare reforms are assessed. It warned that reforms were ‘likely to have a major impact on housing associations’ operating costs’.
The submission said the Budget ‘provides an ideal opportunity’ for the government to follow through on its commitment to release public land to housing associations.
It said small parcels of land, which could accommodate up to 100 homes, should be released to enable homes to be built at a faster rate.
The NHF also called for the government to reduce VAT on services for housing associations and to extend the exemption on stamp duty to social housing developments that are not subsidised centrally.