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LGA chair: ‘penny has finally dropped’ for PM on affordable housing
The “penny has finally dropped” for the prime minister on affordable housing, the chair of the Local Government Association has said.
Speaking at the launch of a Smith Institute report into council housing companies, Lord Gary Porter said the only way to beat the housing crisis is for the state to build affordable homes, but said he doubts the Treasury agrees.
“When the state was properly building affordable units we were doing 100,000, and the only way we’re going to tackle the housing crisis is by getting back into that,” he said.
“I think the prime minister has finally had the penny drop with her, but I’m not sure how we get past the Treasury.”
Lord Porter said it is a “bloody farce” that councils have had to create housing companies “to tackle a problem that gets political consensus whenever it’s raised”.
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He said councils across the country are setting up housing companies “mostly because it’s a good money-laundering exercise”.
He added: “The government has got us screwed to the floor in terms of income generation and this is one way we can maximise our returns. If you can put your money in your own housing company and get 8% on revenue and 8% capital growth, why wouldn’t you do it?
“So I think at some point every council in the country will have a housing company of some description and whether they play an active role in wanting to affect their housing market or not will depend on their appetite for that.”
However, he said housing companies are not focused on social housing.
“We’ve had a 40-year housing experiment that’s failed. This country does not build enough social houses and that’s where the problem is and this won’t be part of that solution. It will be part of the solution to make sure homes are built,” he added.
Instead, these housing companies could raise the quality of the private rented sector while councils focus on social housing, Lord Porter said.
