Government needs to invest significantly more in genuinely affordable homes and be far bolder in its support for councils if it is to meet the ambition to deliver 300,000 new homes a year, according to a major study by the TCPA, funded by the Nationwide Foundation.
The report has revealed appetite for innovation from councils right across the country, but also concerns from many councils about their ability to deliver genuinely affordable homes available at social-rent levels.
The research, involving a survey of 76 councils, found that social rent is the most in-demand housing tenure among over half of English councils, although in 2016/17 just 5,380 new social rented homes were built in England.2 Further to this, 80% of councils said that increasing grant levels would encourage councils to build more affordable homes, and 2/3 of councils said that lifting the Housing Revenue Account (HRA) borrowing cap would allow them to build more homes (which the government has done in the budget, although this is limited to areas with ‘high affordability pressures’).
2% of councils in England say that new development in their area meets policy requirements for affordable housing, according to a report by the Town and Country Planning Association (TCPA).
The research, which was taken from a survey of almost 90 councils, highlights the lack of resources available to local authorities trying to meet demand for affordable homes, with 70% of respondents saying that they are forced to rely ‘substantially’ on developer contributions to secure even this amount.
Councils and charities have long called for government to lift the HRA borrowing cap, which would give local authorities greater freedom to meet housing demand in their areas. The chancellor, Phillip Hammond, last year announced an additional £2bn of funding to help councils fund their own affordable housing projects and a lifting of the HRA borrowing cap, but this has been criticised for being available only in ‘high-value’ areas and for being inaccessible for at least another year.