Let councils borrow to build plea

THE leader of Rochdale Borough Council is calling on the government to give local authorities the chance to borrow the funds needed to build new homes.

Cllr Richard Farnell, who is also the housing lead in Greater Manchester, wants councils to be allowed to borrow money for house building to tackle the national shortage of new homes.

A recent figure released by the National Housing Federation indicated that 245,000 homes needed to be built every year, including 80,000 affordable homes, to meet demand. Less than half that figure is currently being built.

The cross-party House of Lords Economic Affairs Committee said that the government had to “recognise the inability of the private sector, as currently incentivised to build the number of homes needed.”

Lord Hollick, chairman of the committee, also criticised the government for being “too focused on home ownership”.

The current government has built the fewest new homes in England and Wales since 1923, according to data released by the independent House of Commons library.

Lord Hollick’s report, Building More Homes, recommended that the Government should relax the rules on how much local authorities are allowed to borrow to fund social housing, and take advantage of the current historically low cost of borrowing.

The chairman added: “Local authorities are keen to meet this challenge but they do not have the funds or the ability to borrow to embark on a major programme to build new social homes.”

Coun Farnell said: “It’s absolutely ridiculous that Rochdale Council is free to borrow cash to build a swimming pool but we can’t do the same to build much-needed homes.

“Government needs to make it easier for local authorities up and down the country to enter into partnership with housing associations and institutional investors to get building and meet the growing demand.”