16.10.17
Council housing companies driving ‘quiet revolution’ in local building
A “quiet revolution” in council housebuilding could see homes built by local authority housing companies (LHCs) deliver up to 15,000 extra homes a year by 2022.
In a new report published today by the Smith Institute, it has been revealed that councils are not waiting for the government to give the go-ahead to build new affordable houses, but are instead moving forward with providing new homes though their own arm’s-length companies.
As recent findings have suggested, government efforts to build enough affordable houses have fallen short of the growing demand many local authorities are now facing.
This has led to councils taking matters into their own hands, as the report describes how local housing companies are set to build 15,000 extra hoes per year by 2022, compared with just 2,000 new council homes in 2016. The number of LHCs has now risen to 150, and the think tank believes the number could top 200 by 2020.
The report states that LHCs offer a “triple dividend” to councils of providing extra housing, giving them a greater stewardship role in place-shaping, as well as also giving a financial return to the local authority.
Researchers also argue that the government needs to give more help to LHCs, which have been instrumental in many areas to driving housing reform.
Amongst a number of key recommendations, the Smith Institute said that DCLG and local government, perhaps through the LGA, should consider establishing a high-level commission or taskforce to consider how best to maximise the potential of LHCs as alternative providers of housing.
It also suggests that councils should be able to retain all their Right to Buy receipts and that the government should move ahead with promised CPO reforms and examine the potential benefits to LHCs.
Paul Hackett, director of the Smith Institute and author of the report, said: “LHCs are spreading like wildfire. At this rate, the majority of councils – of all types and all political colours – will soon have a housing company.
“It’s not a silver bullet to solving the housing crisis, but it will make a difference locally. Surely it makes sense to support these companies, many of whom are providing affordable homes.”
Lord Porter, chairman of the LGA, added that LHCs are an example of how councils can help plug gaps in local housing markets when given sufficient powers and resources, as well as “look for ways to build outside of the restrictions on the housing revenue account.”
“It’s crucial, though, that the government provides a stable environment to allow councils to invest in homes and get on with the job,” he argued.
The LGA chairman explained that this means enabling councils to self-finance new homes, lifting the housing borrowing cap, and allowing councils to use 100% of the receipt from Right to Buy sales to invest in new homes.
“It’s also essential that councils can set fees locally to cover the costs of processing applications and that there are no further increases in the threshold for the New Homes Bonus,” he continued.
“Councils are determined to lead the way in building new homes, and are leading local innovations finding different ways to make this happen. We’d like to see the government properly throw its weight behind our work and provide us with the tools to get on with the job.”
Top Image: Yui Mok - Press Association Images
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