May removes yet another obstacle to council home building

This week has been the Conservative Party's conference, and their chance to match Labour's pledges to abolish Section 21 and seed-fund renters' unions. 

There is a lot of worry among the party faithful that they are not doing enough about housing - the defining political issue of a generation. But with consultation responses on security being scrutinised by officials back in Whitehall, and Help to Buy facing negative attention, their options were narrow.

First, we heard that offshore property investors will be hit with a new stamp duty surcharge. It only applies to people who don't live and pay tax in the UK, and will fund initiatives to fix rough sleeping. 

The only new policy in the Housing Secretary's speech on Monday was a New Homes Ombudsman (not a new Homes Ombudsman), which sadly tells us nothing about how the redress system for tenants, landlords and letting agents will look.

The Housing Minister (Kit Malthouse this month) told a fringe meeting to expect an announcement on renting/housing today.

We didn't have a clue what it would be but I gave an interview to BBC Radio about this morning's story on rent affordability and called for security of tenure and more investment in social housing. 

The Prime Minister duly pledged to scrap the cap that limits how much councils can borrow to build new homes. Reports already suggest that this could see councils take on up to £15bn and build at least 15,000 homes a year. To put that in context, in the year to June 2018, councils built only 1,840 homes. 

Councils would be borrowing against their "Housing Revenue Account", i.e. their future rent from council tenants, and many councils no longer own housing, so won't be able to do this. There is therefore more that needs to be done to get more homes built. 

Last year, when Theresa May announced £2bn for affordable housing, we demanded changes to how Right to Buy receipts are treated (partly addressed today), access for councils to land at existing use value (i.e. cheaper), and extra investment from stamp duty receipts.

The extra borrowing won't automatically lead to new council homes. A danger is that councils facing large budget shortfalls will be tempted to build homes for market rent or sale, instead of local people most in need of low cost housing. Reform of land will help address this.

And while we wait for that and all those homes to be built, the government must take action to give renters a stable home, by ending Section 21 and limiting rent rises.

 

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