Councils' new borrowing powers may deliver 10,000 homes
Published by Max Salsbury for 24dash.com in Housing and also in Central Government, Development, Finance
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The government claims that new borrowing powers it has given local authorities will lead to the development of 10,000 new homes.
Communities secretary Eric Pickles and Chief Secretary to the Treasury Danny Alexander announced today that the country’s councils will be now be able to bid for a share of £300 million in extra funds.
The money will be made available through an increase in individual councils' housing revenue account borrowing caps, and invested in new 'affordable' housing over two years from 2015.
The ministers also confirmed that the rules about council land sales would change, so more surplus and redundant land and property can be released for housebuilding.
Councils that apply for extra borrowing powers will need to demonstrate maximum value for money, by including funds from disposal of surplus assets, particularly high-value vacant stock, and by bringing forward their own land for new 'affordable' housing.
The government also says that it has "untied councils’ hands" by reforming the system for council house finance.
Local authorities can now keep their rents and receipts from house or land sales, in return for taking more responsibility for housing in their area.
The coalition is additionally giving councils more flexibility to sell their land for new development. Starting today, they can now sell their vacant land at below market value to a broad range of organisations if it is then used to build 'affordable' housing.
Eric Pickles said: "We have untied the hands of councils so they can take more responsibility for housing in their area. Councils have built more homes in the last 3 years than under the whole of the last government - 170,000 affordable homes have been delivered since 2010, and housebuilding is now at its highest level since 2007.
"But there is still more to do. Today we are offering extra borrowing powers so councils can build more homes. We are also making it easier for councils to sell surplus and redundant property for new affordable housing, and they should consider what land they can release for the benefit of their local community."
Danny Alexander added: "The government recently launched a review into the role local authorities can play in supporting new housing supply, led by councillor Keith House and Natalie Elphicke.
"However, I am also determined that we do even more to empower local communities to deliver more good quality housing now. This additional borrowing flexibility, together with funding from the sales of high value social homes and other forms of local investment will deliver 10,000 new affordable housing over the next few years – supporting the construction sector and providing new homes."