CONSERVATIVE PARTY CONFERENCE: Theresa May has announced the scrapping of council borrowing caps to allow local authorities to build more homes.
A cap on the amount councils can borrow to fund new developments “doesn’t make sense”, the prime minister said in her conference address.
The government will remove the limit on the amount local authorities can borrow against their housing revenue account assets.
Melanie Leech, chief executive of the British Property Federation, said: “Lifting the council borrowing cap is something our industry has called for over many years and should enable local authorities to invest in their communities’ economic and social wellbeing.
“We urge local authorities to take advantage of this, to support new housing delivery and provide a significant boost to the social housing sector.”
The announcement comes amid a conference that has focused heavily on home ownership, but the Conservatives have conceded that they need to do more to win over the renting public – both private and social.
Hew Edgar, RICS head of policy, said the move will allow councils to be genuine players in housing again.
“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. Indeed, 40 years ago, local councils built 40% of all new homes; but for too long, councils have been limited in their capacity to make this significant contribution.
“The next stop is the UK Budget on 29 October, and we would urge the chancellor to build on this policy and support a wider range of housebuilding participants; thereby diversifying housing delivery vehicles and tenures.”
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