A ‘long overdue’ plan to let councils borrow more to build more homes was ‘inevitable’ say council leaders.
Conservative Councillor Matthew Lee said his authority were ‘delighted’ by the ‘inevitable’ lifting of the borrowing cap by Prime Minister Theresa May during the Conservative party conference this week.
He said his authority was committed to building more council and affordable houses.
“The level of house building that needs to happen in this country can only be achieved, and has only been achieved, when councils were building houses and the private sector was building houses,” he said.
“So it was inevitable that the Government was going to have to do this. If you want to build the level of housing you need, we as councils are going to have to build.”
Councillor Lee said the authority wanted to ensure no-one was priced out of the housing market in the area, especially for instance, if people had specific skills such as nursing.
He said they would be bringing plans to look for grant funds and the ability of the council to borrow money ‘to support our local community’.
Mrs May made the announcement in her closing speech at the Conservative party conference when she said the government would scrap the cap on the amount local authorities can borrow against their housing revenue account assets.
“Solving the housing crisis is the biggest domestic policy challenge of our generation,” she said. “It doesn’t make sense to stop councils from playing their part in solving it.
It is understood the change could potentially lead to an extra £1bn borrowing and tens of thousands of new homes.
City of Lincoln Council leader councillor Ric Metcalfe said the announcement was ‘long overdue, but welcome nonetheless’.
He said the authority had ‘been lobbying government to instigate this change for a number of years’ adding: “Its decision is a positive one for the future of housebuilding in the city.”
“Investing in news homes will allow us to increase housing supply in Lincoln. We have almost 2,000 people on our waiting list for a council property and we have already begun to address this issue with our promise to deliver 400 new homes by 2020.
“Clearly, the devil will be in the detail and we now await the exact details of the promised change. As long as government stays true to its word, this should prove to be excellent news for Lincoln.”
The cap was introduced under Margaret Thatcher.
South Holland District Council leader and Local Government Association chairman Lord Gary Porter has also praised the decision.
He said: “It is fantastic that the Government has accepted our long-standing call to scrap the housing borrowing cap.
“Our national housing shortage is one of the most pressing issues we face and it is clear that only an increase of all types of housing – including those for affordable or social rent – will solve the housing crisis.
“The last time this country built homes at the scale that we need now was in the 1970s when councils built more than 40 per cent of them.”