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Council House Building Freedom

04 Feb 2009

Councils may soon have greater freedom to build more homes.

Councils may soon have greater freedom to build more homes under plans going out to consultation. Under the proposals announced by Housing Minister Margaret Beckett, councils would be able to keep all the rental income from any homes they build, as well as keep the receipts from any of those homes which are later sold through Right to Buy. The extra money could free councils to invest in the building of more council houses, helping to deliver more homes for families in need.

Councils currently only build a few hundred council homes a year, with the majority of new social homes being built by registered social landlords (RSLs). The consultation proposals would seek to boost this build rate by removing some of the financial barriers stopping councils from building new properties and increasing their housing stock.

The government recently announced it would invite councils to bid for a share of the capital grant given to social landlords to subsidise the cost of new housing. The new financial rules will make it possible for councils to compete for this funding alongside other providers of social housing such as registered social landlords.

However, according to the Association for Public Service Excellence (APSE) these proposals could go further. As they stand, only a small number of properties that are built, purchased or brought back into use as a result of council investment will be outside of the Housing Revenue Account redistributive system.

APSE chief executive, Paul O'Brien said: "The changes proposed will provide councils with some extra resources and incentives to build council houses, but they are unlikely to be enough to make a significant difference to local government's ability to build houses. If the government is serious about meeting three million homes target by 2020, in the current economic climate, it must be willing to provide further substantial powers and incentives to local authorities so they are able to make a sizeable contribution to the target. This would also provide a much-needed boost for the construction industry and hence job opportunities locally."

News source: Courtesy of Glass & Glazing Magazine