The cap on council borrowing is preventing London councils from building housing for low-income families, according to a new report in LG News.
Right to Build: What’s Stopping Councils from Building more Housing? from the London Assembly calls for new measures to be introduced to enable councils to build more housing.
It argues the cap on council borrowing should be lifted and owned by public bodies should be made available to London boroughs at a rate low enough to make house-building a viable option.
It also calls for further funding for the Decent Homes programme and the sale of new council housing to be put on hold.
Darren Johnson, chair of the Housing Committee, said: ‘Poor supply and rising rents mean that London Boroughs, hindered by overly cautious borrowing rules, need help to increase the supply of housing.
‘We’re calling on the Mayor to put pressure on the Treasury to lift caps allowing more sustainable borrowing to build the homes Londoners need. The Mayor, in charge of one of London’s largest owners of public land, has 600 hectares of land at his disposal. Barriers to building sizable family homes can be broken down by the Mayor granting this land at a plausible rate for renting to low-income households.’
‘Funding is also vital to ensure council property standards do not hinder tenants’ quality of life. We ask that purely cosmetic changes to dilapidated properties, acting as little more than a sticking plaster, are replaced by carefully considered upgrades and rebuilds and, where needed, new council housing. It is likely only half the number of homes will be built this year by councils than were sold last year via right to buy. Measures are needed now to give London councils the support needed to allow them the right to build.’
The report found that while over half of London councils were looking to build new housing, most are unlikely to build more than 500 new homes this year. Over 1,000 homes were sold under Right to Buy in 2012-13.