Prime minister’s plan to scrap borrowing cap may help Redbridge Council build more homes but will there be enough builders to erect properties after Brexit immigration proposals?

PUBLISHED: 10:49 04 October 2018

Before the introduction of the cap under Margaret Thatcher, councils built around 10,000 homes a year - but post cap, the number dropped to as low as 100. Picture: Google

Before the introduction of the cap under Margaret Thatcher, councils built around 10,000 homes a year - but post cap, the number dropped to as low as 100. Picture: Google


Redbridge Council said the government has “listened to common sense” after the prime minister announced plans to lift the cap on the amount councils can borrow to build more homes.

After strutting on stage, while dancing to Abba’s Dancing Queen, Theresa May used her closing speech at the Birmingham Conservative Party conference to reveal that she is getting rid of the borrowing limit on Wednesday, October 3.

The Federation of Master Builders (FMB) also welcome the news but said recent government immigration plans could hamper how many houses actually get built under the scheme.

Responding to the announcement yesterday by the prime minister, leader of the council, Councillor Jas Athwal said: “Along with many other council leaders, I’ve been saying for a long time that the Tory government needs to remove the shackles from local government and take a serious look at the problem with the amount councils can borrow to solve the housing crisis.

“I’m pleased the Tories have finally listened to common sense.

“We have a severe lack of affordable housing in Redbridge, and more widely in London and we have been taking the lead in fixing the shortage by building four new affordable housing developments this year alone and pledging to build 1,000 more homes.

“I am excited at the prospect of building more council homes for our residents and being able to take families out of unsuitable and often cramped and insecure accommodation. There are still major challenges as we need to source builders and construction takes time, but I can’t wait to help the many people on our council house waiting list.”

The leader said he will look at the details of the plans more closely but anything that removes government bureaucracy and gives local authorities more freedom to deliver housing that residents “so desperately need” is welcomed.

Before the introduction of the cap under Margaret Thatcher, councils built around 10,000 homes a year - but post cap, the number dropped to as low as 100.

The extra amount of investment will be dependant on how many councils decide to borrow, but Mrs May said it could be around £1billion a year.

Brian Berry, FMB chief executive said: “This is the most exciting, and potentially transformative announcement on council housing for many years.

“It is something the house building sector and local authorities have been crying out for since the last economic downturn as a means by which to increase house building.

“Indeed, the only times the UK has built sufficient numbers of homes overall is when we’ve had a thriving council house building programme.

“Local authorities have a strong interest in delivering new affordable homes and many would have the appetite to directly fund this, but have been frustrated from doing so by an artificial cap on their ability to borrow against their assets to build homes.

Mr Berry said that while the plans are a “bold and praiseworthy move” new homes of any sort will not get built if the industry doesn’t have the people needed to build them.

“Recent announcements on post-Brexit immigration rules, if implemented as currently understood, will be a serious threat to our ability to deliver on the promise of this policy.

“The failure of the government so far to listen to the construction industry could, unfortunately, threaten the delivery of the government’s increasingly bold moves to solve the housing crisis.”

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