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Nottingham calls for borrowing cap to be lifted to boost new council housing supply

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Nottingham calls for borrowing cap to be lifted to boost new council housing supply

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Published by Jon Land for 24dash.com in Housing and also in Local Government

Nottingham calls for borrowing cap to be lifted to boost new council housing supply Nottingham calls for borrowing cap to be lifted to boost new council housing supply

Nottingham City Council has become one of the first in the country to call for limits to be lifted on the amount local authorities can borrow to build new homes.

Councillors unanimously backed the ‘Let’s Get Building’ report from the National Federation of ALMOs (NFA) when they met on Monday (January 28).

Despite changes to the way homes are financed last year, the Government continues to restrict how councils manage their own finances – imposing a cap on how much they can borrow to build new social housing.

The biggest council home building programme in 40 years is now beginning in Nottingham – 350 will be built in the next five years. But the council says it could responsibly borrow more and build more if it was allowed to.

Lifting the restrictions could free up more than £4 billion nationally. The NFA’s report says councils can only currently invest an extra £2.8 billion – but without the cap this rises to around £7 billion.

According to Nottingham City Council, lifting the cap would mean hundreds of new council homes could be built in the city – creating more new jobs and apprenticeships at a time when construction companies are going bust and skilled workers are losing their jobs.

Cllr Alex Ball, Executive Assistant for Housing and Regeneration at Nottingham City Council, said: “Together with Nottingham City Homes, we desperately want to be able to build more homes for rent – but we can’t because the Government doesn’t appear to trust us.

“We have 12,000 people on our housing register in Nottingham – but because we have limits on the amount we can borrow to build it means they can’t move into homes at social rent levels.

“Local councils have an excellent record when it comes to borrowing money to invest – so let us do it and invest in our city.”

NCH Chief Executive Nick Murphy said: “Nottingham needs new homes. Investing in building new homes brings lots of benefits. Building new homes is vital to the construction sector and the national economy.

“It not just helps provide much needed housing for rent. Investment like this helps our local economy grow, boosts employment and brings down the housing benefit bill as more people are moved out of expensive privately rented properties.

“What we borrow is paid back through the rent we collect – and council rents are lower than private sector landlords. It’s great value all round.”

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