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Liverpool to open HRA to build new council homes for first time in 30 years
Liverpool City Council is to start building council homes for the first time in 30 years after making plans to reopen its Housing Revenue Account (HRA).
The city’s mayor Joe Anderson said he had already earmarked a site for the first 150 new council homes to be built in Knotty Ash, an area east of the city centre.
“We have pledged that we will build 10,000 houses and now a very large proportion of them will be council houses for people to rent – affordable, social, council houses that we desperately need in this city,” he told the Liverpool Echo.
The council had transferred its stock to housing associations including Liverpool Mutual Homes during the 2000s in order to benefit from the then-Labour government’s Decent Homes funding for stock improvements.
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The HRA cap was introduced in April 2012 as part of local government self-financing reforms, and set a limit on each council dictating how much they could borrow to invest in housing.
But following the government’s announcement of new borrowing powers for council development last year, the HRA cap was scrapped, and Mr Anderson said that Liverpool City Council would now use its HRA to directly own council housing again.
The Ministry of Housing, Communities and Local Government confirmed Liverpool’s move and said that the debt associated with the stock transfer, believed to be around £130m, would not be reapplied once the HRA was reopened.
Inside Housing understands that the plans would have to be approved by the council’s cabinet, a process which could take many months.
In December, Liverpool City Council announced it had set up a housing company, Foundations, to deliver £1bn worth of development in the coming 10 years.
The wholly owned firm designs and builds its own schemes, as well as purchasing finished developments from contractors. It will deliver homes across tenures – including offering a Rent to Buy product which would allow people to pay discounted rent on a home in order to save up enough for a deposit.
At the time, Mark Kitts, chief executive of Foundations, told Inside Housing that it was “too early to say” whether Liverpool City Council would consider opening a Housing Revenue Account – but that the council had been “taking legal advice on this” since the borrowing cap was lifted.
