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New debt rules for housing associations to boost building

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The government is to take housing associations’ debt off the balance sheet in a bid to get them building more social housing – but there are no signs of increased fiscal freedoms for councils.

Reversing a move implemented in 2015 will give housing associations “a stable investment environment to build more homes”, 10 Downing Street said.

But Martin Tett (Con), Local Government Association housing spokesman, said there is “no chance of housing supply meeting demand unless” the chancellor lets councils “borrow to build again”.

He said it is “vital” councils’ borrowing cap for housing is lifted and urged the government to “remove that borrowing from contributing to the national debt”.

“That is essential to provide a sustainable long term financial framework for councils to invest in desperately-needed new homes,” he said. “All social housing must be treated the same and council housebuilding must be part of the solution if we are to stand any chance of solving our chronic housing shortage.”

The last time the country built about 300,000 homes in a year – a stretch target Mr Javid voiced in an interview with the BBC last month – was in the 1970s when councils built more than 40% of new homes, said Cllr Tett.

He added: “It is also important that housing associations continue to work with councils to provide the genuinely affordable homes our communities desperately need.”

Mr Javid is due to deliver a speech on housing in Bristol this morning to confirm the announcement relating to housing associations’ debt being wiped from the balance sheet.

He is expected to say: “Without affordable, secure, safe housing we risk creating a rootless generation, drifting from one short-term tenancy to the next, never staying long enough to play a role in their community.”

He will add “there are many, many faults in our housing market, dating back many, many years” and “this is a big problem and we have to think big” in order to solve it.

This comes as prime minister Theresa May visits a housing development in Barnet, London, where she is expected to say she has “made it my mission to build the homes the country needs and take personal charge of the government’s response” to the housing crisis.

“This will be a long journey and it will take time for us to fix the broken housing market - but I am determined to build a Britain fit for the future,” she will say.


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