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Willing but not able – councils inhibited on housebuilding

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LGC’s essential daily briefing

“Everybody’s building, everybody’s building;

“Everybody’s building, day by day;

“Everybody’s building, everybody’s building;

“Everybody’s building, in a different way.”

Those are the lyrics from the chorus of a popular (well, it was at my primary school anyway) hymn.

Hazy memories of those long-ago days were evoked today by Royal Town Planning Institute research which found 91% of all councils are, in some way, involved in providing more homes.

The study, ahem, builds on LGC’s own research from April 2016 which found an increasing number of councils were setting up companies to deliver new homes.

This latest survey found 44% of all councils now had a wholly owned housing company with 30 set up in 2017 alone.

It would appear on the face of it that business is booming.

The latest housing figures, published last month, showed there were 217,350 “net additional dwellings” in 2016-17. While 183,570 were new builds, 37,190 came from properties changing use – such as office to residential.

That aside, the country is still some way off meeting the government’s new ambition of building 300,000 new homes a year.

So how likely are local authority housing companies to bridge that gap?

The research conducted by Professor Janice Morphet and Dr Ben Clifford of the Bartlett School of Planning, University College London certainly found some ambitious councils out there.

Wolverhampton City Council, which set up a housing company last year, aims to build 10,000 homes within 10 years, for example.

In London, Redbridge LBC hopes to build 8,000 homes in the next five to six years through the company it set up, also last year.

Aspirations are one thing, but delivery is another.

Take Birmingham City Council’s municipal housing trust – a well-regarded model – as an example. Set up in 2009, seven years later it had built its two-thousandth home.

The company is now building a quarter of all new homes in the city, the council’s director of housing development Clive Skidmore told the audience attending the report’s launch yesterday, but it has clearly taken some time to get to that point.

It’s possibly just as well chancellor Philip Hammond doesn’t foresee meeting the country’s target of building 300,000 additional homes a year before the “mid-2020s”.

But as the report acknowledged, some councils which started building fewer than 50 homes five years ago “are now achieving over 1,000 per year”.

These are solid foundations to build on but the housing crisis is here and now, and it’s questionable as to whether the country can afford to wait for another half a decade or more for councils only just embarking on their housing company ventures to catch up with the leading pack in terms of delivery.

In a recent column for LGC, Brent LBC chief executive Carolyn Downs called on the government to “act in a radical and co-ordinated way to enable councils to build more homes” by letting local authorities borrow more to build, better fund those with the highest levels of homelessness, and bring an end to land banking.

“Without these measures we will continue to do a fantastic job but fail to solve the problem,” she said.

In a recent interview with LGC’s sister title Construction News, London mayor Sadiq Khan (Lab) called on the government to stump up more money or warned housing targets will not be met.

Evidence suggests councils are not just willing, but able, to help tackle the housing crisis but until the government frees them up to build at scale it will largely amount to tinkering at the edges.

David Paine, chief reporter

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