Local government supports the collective national ambition to build one million new homes by 2020, but house building is currently well below the levels required for an efficient and fully functioning housing market.
Key messages
- Local government supports the collective national ambition to build one million new homes by 2020, but house building is currently well below the levels required for an efficient and fully functioning housing market. Last year housing supply increased by 190,000 new homes, but it is generally accepted that the country needs to build 230,000 to 250,000 homes a year to keep up with demand. The last time the country built more than 250,000 homes in a year, in the 1970s, local government built around 40 per cent of them.
- As we have explored in our Growing Places report, the Government can support local government to build additional new homes by providing councils with financial flexibilities and a stable and sustainable long-term framework. This should include removing borrowing for housing investment from contributing towards public sector debt and allowing the Housing Revenue Account borrowing cap to be lifted. A new wave of different affordable housing options should also be built, linked to a new definition of affordable housing as being of a cost that is 30 per cent of household income or less.
- Home-ownership remains the nation’s preferred housing tenure and councils want to contribute to the discussion on future policy of interventions that support households to save for home ownership, However, access to home ownership remains limited to many households due the rise in house prices above earnings. It is therefore essential to ensure that renting tenures offer sufficient homes in terms of number, quality and security of tenure at affordable prices.
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