A government policy that will force local authorities to reduce rents for social housing tenants by 1% every year could prevent district councils from building almost 4,000 new homes.
A survey of 73 districts with housing stock carried out by the District Councils Network found the cut would see them lose about £603m in anticipated income by the end of the decade.
Respondents warned that could prevent them from building more than 3,700 new homes by 2020.
The chancellor announced the policy in his July Budget. The first 1% cut will be applied from April 2016, followed by cuts over the next three years.
The survey was conducted ahead of talks between DCN officers and senior housing and finance policy officials at the Department for Communities & Local Government. DCN chair Neil Clarke (Con), who is also leader of Rushcliffe BC, has also formally requested a meeting with ministers to discuss the policy.
Steve Atkinson, DCN’s director, said reducing rents by 1% every year would have a “significant negative impact” on the ability of districts to build new homes and added it was a concern that some house building activity had “stalled” already as a result of the policy announcement in the Budget.
He said: “It is to be hoped that a way ahead can be reached ultimately with ministers on this issue so that district councils can continue to play their full part in delivering national house building ambitions.”
Picture taken by Anthony Shemmans.