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Councils across the country are gearing up to return to housebuilding after a generation in the wilderness. But the government must not think its work is done, writes Peter Apps
This year, we have dedicated much of our coverage to marking the 100th anniversary of council housing as we know it. Well, welcome to the next 100 years.
Our exclusive research this week puts a figure on what people in the sector have known for some time: council housing is back. Over the next five years, England’s local authorities have serious plans to build 80,000 new homes.
This is still some way off the heady years of the 1950s when they neared 200,000 annually, but it is an incredible number when you consider that a decade ago in 2009, they hit a nadir of just 140 starts across the whole country.
The journey back from the abyss has been gradual in the 10 years since: some small gains as a result of the limited borrowing powers granted under self-financing and the pioneers of the council-owned companies starting to realise their ambitions. But still they were operating on the margins, building only around 1% of all new homes. For years, this has been identified as a major missing piece in our dysfunctional housing market.
It is last year’s decision to lift the borrowing cap that has opened the door for the return – arguably the most welcome housing policy of recent years.
But politicians must not spend too much time patting themselves on the back. These numbers show green shoots. They need to be nurtured if they are to grow.
First, ministers must be realistic about what they have offered. The power to borrow is great, but it is one piece of the jigsaw.
At every stage in our history, when we have built genuinely large numbers of social homes, there has been substantial investment from the public purse.
If we want to see those figures repeated, politicians must be bold enough to invest the grant. This should be seen as a sensible infrastructure investment that will benefit the country and the economy.
The truth is there is no other way. The past decade has seen housing grant come down and the money replaced with either profits from open sale or higher affordable rents. These wheels are now broken: the sales market that provided the subsidy is cooling off and higher rents have put homes out of reach of the homeless.
Large developing housing associations have recognised this. The development director of L&Q – the poster boy of cross-subsidy – this week described the model as “absolutely bust”.
But the same numbers that run through housing association accounts run through councils. In the end, you cannot build low-cost rented housing at scale without investment from government.
This is the argument politicians of all parties must recognise. The shape of the next 100 years depends on it.
Peter Apps, deputy editor, Inside Housing
Note: this article is the leader for this week’s print magazine. It was written before the news about the Public Works Loan Board borrowing rates increasing broke yesterday.