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Rent rise exemption call for councils that build

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Councils willing to build more homes should be exempt from the 1% rent reduction imposed by the government, the Chartered Institute of Housing has said.

The professional body’s Budget submission said councils that agreed to increase delivery of homes for rent should not be bound by government policy to cut social housing rents by 1% a year to 2020. They should also be allowed to borrow more money for building and retain all right-to-buy receipts, the organisation said.

Former chancellor George Osborne imposed the annual 1% rent reduction, throwing into question the viability of long-term building plans made by councils and housing associations based on previous rental levels.

The CIH said councils exempted from the rent reduction would have to enter deals with the government for “concrete and deliverable commitments to increase the number of new homes that they build”.

Meanwhile, Homes and Communities Agency chair Sir Edward Lister has warned that councils opposed to development on public land released for housing cannot expect funds from the quango.

In remarks at the UK housing delivery summit, confirmed by the agency, Sir Edward said he wanted to allocate housing funds to councils on the basis of a “journey of the willing,” and would not “waste our time battling people”.

The former Conservative Wandsworth LBC leader said: “We need to deliver houses, and therefore we need local authorities that want to deliver houses.”

Sir Edward said allocations from the £2.3bn housing infrastructure fund, announced in the autumn statement, would be made only where projects would quickly unlock housebuilding programmes.

Those that lacked clear housing plans would be unable to access funding, he said.

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