The Prime Minister’s announcement that the government will lift the borrowing cap on councils to allow them to build many more homes is a victory for bold thinking and common sense, says the Federation of Master Builders.
Describing yesterday's announcement as the "most exciting and potentially transformative" about council housing for years, Brian Berry, Chief Executive of the FMB, (pictured) said: “It is something the house building sector and local authorities have been crying out for since the last economic downturn as a means by which to increase house building. Indeed, the only times the UK has built sufficient numbers of homes overall is when we’ve had a thriving council house building programme.
"Local authorities have a strong interest in delivering new affordable homes and many would have the appetite to directly fund this, but have been frustrated from doing so by an artificial cap on their ability to borrow against their assets to build homes. In a victory for common sense, Mrs May has now signalled that the borrowing cap will be scrapped to allow councils to build many more new homes.”
The move could could also expand the private sector's capacity by providing more opportunities for SME builders, with the public and private house building sectors supporting one another.
"The private sector will continue to take the lead in delivering new homes and, to ensure it can do so, we need to continue to lay the foundations for a diverse private sector in which new firms can more easily enter the market and small firms can more easily prosper and grow," he said. "However, in order to deliver the number of new homes the government is targeting, it is going to be necessary for the private and public sectors to both be firing on all cylinders. That’s why this announcement is so welcome.”
Berry sounded a note of caution, however, highlighting the need for the construction industry to have the people and the skills needed to make Therea May's "bold and praiseworthy" a reality.
He said: "Recent announcements on post-Brexit immigration rules, if implemented as currently understood, will be a serious threat to our ability to deliver on the promise of this policy. The failure of the government so far to listen to the construction industry could unfortunately threaten the delivery of its increasingly bold moves to solve the housing crisis.”