‘Good and competent’ councils should be able to borrow more to build, says MP

3 Oct 17

Local authorities that are “good and competent” should be able to borrow more to build homes, a Conservative MP has told a fringe session at the Tory’s annual conference.

Kevin Hollinrake MP also hinted the government might be willing to talk to “ambitious” local authorities to “forge bespoke deals” so they can borrow more to fund homebuilding projects, at an Institute of Economic Affairs and McCarthy & Stone session yesterday.

“Clearly major house builders need to build more, but also housing associations need to build more, they are looking to treble the number of homes they build but we need local authorities to help as well,” he said.

As well as local authorities which are “good and competent” being allowed to borrow money for homebuilding he believed they should also be able to land bank themselves.  

Councils should be able to “buy land and get planning permission on it, service the plot and sell it on to large builders or preferably to small builders,” the MP for Thirsk and Malton stated.

Hollinrake also pointed out forecasters have estimated the UK needs to build 250,000 homes annually to keep up with demand.

“The last time we built 250,000 homes in this country in a year was 1972 when local authorities built over 100,000 of these homes,” he pointed out.

Hollinrake said the housing white paper – out early this year – had hinted the government would be willing to financially help “ambitious” councils that wanted to borrow more to fund housebuilding.

The Conservatives kick-started their conference over the weekend announcing they were expanding the Help to Buy equity scheme with an extra £10bn.    

Waveney MP Peter Aldous said one way of encouraging more SME builders to construct more homes would be to exclusively sell public land to them.  

Harrow East MP Bob Blackman suggested to attendees that housing associations should be encouraged to build more homes by threatening their “large” balance sheets, which he said were basically grants from the government.

“If we say to those housing association you can keep that money provided you use it to build new homes but if you don’t build homes with it we are going to take it back at 10% a year, I think we would see a rapid change in the way that housing associations operate,” he said.

Blackman also called for more modular system homes, which would be cheaper and quicker to bring to market and still efficient and of high quality.

Although, the private sector is currently only capable of building 160,000 homes a year at its max, according to Blackman.  

“Already there is a huge gap in the supply, if we leave it to the market unfortunately the market will not supply enough homes,” he said.

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