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Councils will have to bid to increase borrowing for housing

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Councils are to be invited to bid for a chance to have their borrowing caps for housing lifted – but they will not be able to do this until 2019-20.

Delivering his Budget speech, chancellor Philip Hammond spoke of “lifting” housing revenue account “caps for councils in high demand areas to get them building again”.

In the Budget red book it said: “Local authorities will be invited to bid for increases in their caps from 2019‑20, up to a total of £1bn by the end of 2021‑22.

“The government will monitor how authorities respond to this opportunity, and consider whether any further action is needed.”

The move falls short of demands from the Local Government Association to lift the borrowing cap for the whole sector.

Meanwhile, the government is proposing to pilot the extended right-to-buy for housing association tenants in the Midlands – but not until 2019-20.

The Budget book said the government “will proceed with a £200m million large‑scale regional pilot” but did not include a date. However, in a table in another section it shows the government has set aside £85m for the pilot in 2019-20. Money has not been set aside in any other year between 2017-18 and 2022-23. It is not clear why there is a £115m funding gap between the statement and the table.

There are also plans to build five new garden towns “including in areas of high demand such as the south east”, the budget book said.

 Another measure will see the the government let local authorities increase the council tax premium on empty homes from 50% to 100%.

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