The council borrowing cap has been scrapped and housing experts are rejoicing

Theresa May danced to the finish line at the Conservative Party Conference today, with some statements in her closing speech catching the attention of commentators.

Speaking in Birmingham, the Prime Minister announced that the Government will lift the borrowing cap on social housing – something called for by lobbying groups for years.

This means that local authorities will have more freedom to borrow in order to develop new affordable housing. With council’s cash-strapped and social housing waiting lists piling up, it is a crucial move with experts dubbing this a big step towards solving the UK’s housing crisis.

May already promised at last month’s National Housing Federation conference that a new £2 billion fund would be made available to help build low-cost homes. The long-awaited social housing green paper arrived the month before to a more muted response. But today’s announcement was top of the wish list for industry organisations and experts.

.@theresa_may: There is a government cap on how much they can borrow against their Housing Revenue Account assets to fund new developments….So today I can announce that we are scrapping that cap. We will help you get on the housing ladder. #CPC18

— CCHQ Press (@CCHQPress) October 3, 2018

Ruth Davison, executive director of public impact at the National Housing Federation, said: “For years, everyone who builds affordable homes – both councils and housing associations – have argued this cap on council borrowing puts the brakes on building more homes.

“We know that we need to build 340,000 homes in England alone every year. Last year, only around 160,000 were built.

“Housing associations are already working hard to build the homes that people need – this announcement will allow them to work more effectively in partnership with councils, pooling their resources and maximising their impact.”

LGA WIN! Fantastic news as @theresa_may announces the housing borrowing cap will be scrapped. The LGA has lobbied tirelessly for this move to allow councils to resume their historic role as a major builder of affordable homes.

Full reaction from us to come 🏠🏡🏘 #ukhousing

— LGANews (@LGANews) October 3, 2018

1) Council freedoms to borrow to build, 2) a ban on combustible material on high rise buildings, 3) some emergency cash for adult social care

Well done team @LGAcomms & @garyporterlga for the months and years of work that result in these successes

Much more to do of course…

— Mark Lloyd (@MarkLloydCBE) October 3, 2018

A Shelter spokesperson called the announcement “a major reform that shows real intent to back the social house-building we desperately need.”

Not bad work for a bunch of volunteers over at @4socialhousing back in 2015 #BorrowingCap pic.twitter.com/QgWkgIVm3T

— (((Tim Morton))) (@TimMorton2) October 3, 2018

However some responses were more cautious with their praise. A Crisis spokesperson said it is “very welcome news,” adding that “the devil will be in the detail, but councils must now play their part and build more homes for social rent – a critical step if we’re to end homelessness.” Meanwhile, housing chiefs were warned to “watch out for strings”.

This could be significant – when I was Assistant Cabinet Member for Housing in Harrow (2010-2013), the borrowing cap was the single biggest block to us investing in building council homes for local people. We had land and we had will. Whitehall said no.

*watch out for strings https://t.co/Lt1rPFhKEv

— Ben Wealthy (@BenWealthy1) October 3, 2018

https://twitter.com/nick_forbes/status/1047463423179718656

The conference predominantly focused on Brexit, while Conservative MP James Duddridge revealed that he had submitted a request for a Tory leadership contest to 1922 Committee backbenchers.