Biggest Council House Builders 2023

But many English councils are in the top 10 as well, despite the less generous funding.

Buried within the numbers are some interesting examples of innovative practice – for example, Brent Council in London was one of a handful that told Inside Housing it is building private rented homes, but capping the rents at Local Housing Allowance levels; in effect, creating a new affordable housing stream outside of the mainstream tenures.

But to get to the main story of who is building the most, Birmingham City Council tops the charts, having completed 688 homes in the 2022-23 financial year – the main time period for our survey.

With 1.1 million living in the city, it is no surprise to see the council at the top of the table. The city also has significant levels of housing need, with an estimated 14,200 people living in temporary accommodation – including 8,312 children.

Yet as this story was being written, Birmingham declared effective bankruptcy. The reasons for the council’s financial distress are unrelated – the council is facing a massive equal pay claim, and ran into trouble on a costly IT procurement. But it undoubtedly casts doubt on whether the council will be able to build the 2,223 homes it expected to in the next five years. It is also a reminder that councils are building up development capabilities at a time when many are struggling financially, after years of cuts. The council did not respond to requests for comment.

Scottish and Welsh councils feature strongly in the council building league table, especially when we look at direct delivery by councils. In the top 10 of direct delivery, we have Aberdeen, Highland and Edinburgh.

London councils also put in a strong showing in the main league table, with Westminster coming second, and Barking and Dagenham and Southwark also making the top 10.

Tom Copley, deputy mayor of London for housing, calls this a “golden era” of council housebuilding in London. “We work now with nearly every council in London, even councils like Bromley that got rid of all their council housing in the 1990s. They’ve recreated the Housing Revenue Account [HRA], and now they’re building again,” he told Inside Housing.

“The things driving them are the homelessness crisis and temporary accommodation crisis. They’re spending millions and they’re forced to put people into private temporary accommodation. They’re thinking, ‘Wouldn’t it be better if we bought or built the homes ourselves?’”

We asked councils to break down their completions, saying how many were developed in-house by the council’s own development teams, and how many were built by council-owned housing companies.

A handful of councils outside England told Inside Housing about housing companies – for example Edinburgh, which has a company called Edinburgh Living. It does not develop itself, but buys from the council development pipeline and other developments and lets those homes at mid-market rent.

But the use of council-owned companies to carry out developments is an English phenomenon. While councils can develop directly using funding from the HRA, council-owned companies provide a different format. Normally they are funded from general funds or other finance. They can be a way for councils with no HRA, or existing stock, to build – although many councils told us they are doing both.

We found that one in four homes completed by councils last year, or 3,049 in total, were built by council-owned housing companies. Looking in more depth at these housing companies shows that, by and large, they are building something quite different to in-house development by councils.

The largest slice is 35.5%, which is for market sale. This may indicate that councils have different priorities for their companies than in-house development teams, which have largely prioritised social rent.

Barking & Dagenham’s council-owned housing company built the most in total – reporting completions of 480. All of this London borough’s completions were through the company, a trend it expects to continue, with zero in-house completions predicted in the next five years, but between 420 and 480 a year with the housing company.

However, this company is a bit of an outlier, perhaps because it is delivering the council’s entire housebuilding ambitions. The largest proportion of its completions – 193 homes – were for social rent.

Eastleigh also reported zero in-house completions. But its housing company, Eastleigh Homes, completed the second-highest number of homes of the council-owned housing companies, at 381. Looking at this company’s output gives you a much more typical example – most of the homes (39%) are for market sale, 36% are for private rent, and the remaining 25% are for affordable rent.

The borough transferred its stock to a housing association in 1996 – those homes are now, through a process of mergers, owned by Vivid. 

Over the past 10 years, Eastleigh has slowly built up its ambitions – another large development involved a commercial loan to a developer that was struggling. It set up partnerships with local housing associations, whereby Eastleigh bought the homes, but all management was done by the association. It has set up several company structures to develop homes over the years.

It has then slowly started to build up its own stock it is managing itself – beginning with some market rent homes. Back in 2021, the council wrote to the government declaring its intention to open an HRA.

Ten years after beginning on this journey, it is in the early stages of developing its first major HRA project that will result in council homes the authority will manage itself – One Horton Heath will be a mixed-tenure community of around 2,500 homes.

A significant number of councils are starting their build programmes completely from scratch, like Bromley. Council housebuilding peaked in the 20th century, but at the turn of the century, many councils transferred their stock to housing associations. This means many have gone decades with little or no experience of managing homes, let alone building them.

One of those is Herefordshire Council. It transferred its stock in 2001 to the association now known as Connexus.

“Due to the rising numbers of people needing an affordable property and the declared climate emergency, Herefordshire Council has taken the decision to become a registered provider and start to develop housing again,” it says on its website. The council set a target of building 1,000 affordable homes – and our data shows that it is making progress towards that goal.

Councils such as Herefordshire have no HRA – a ringfenced pot of money collected from the council’s rents, used for maintenance of existing homes and provision of new ones. That means they have much less capacity to build than their peers who retained council stock. Yet Herefordshire made it into the top 10, completing 287 homes.

A total of 42 councils in our FOI completed no homes in 2022-23, but reported an intention to build in the next five years.

On the one hand, these councils show that there are ambitions to ramp up council housebuilding. But on the other hand, this is a large number of councils with little or no experience, which must build their expertise and capacity from a standing start.

The past few years have shown that those risks are real – as the failure of Croydon’s Brick by Brick shows. The council’s auditors said that the collapse of the company was a contributing factor in Croydon going bankrupt in 2020. Brick by Brick is still in the process of being shut down – the council did not respond to our FOI request for data on this company.

The tone struck by councils Inside Housing spoke to is generally one of financial caution.

“We build responsibly,” says Ben Binns, assistant development director at Cambridge City Council. “The interest rate rise impacts the HRA business plan, so we have to be financially prudent. And that is absolutely sacrosanct.”

Andy Smith is head of finance at Eastleigh Borough Council, another former stock transfer association that is now building again.

Eastleigh is no stranger to scrutiny over its plans – in February this year, the Department for Levelling up, Housing and Communities commissioned an expert review of its finances after its high levels of borrowing were flagged.

But Mr Smith says that the reviewers were positive about how the council is managing this level of borrowing.

“Particularly with housing, we have not got a reliance on the income to support service delivery,” he says. While the council does make a profit from its housing delivery, he says, this is put in reserves and not directed to services. “It does mean, if you were impacted by a rent change or an interest rate rise on your project, it does not impact on wider delivery of council services,” he adds.

300
Councils that responded to Inside Housing’s FOI request

9,054
Homes developed by councils directly in 2022-23

3,049
Homes developed by council-owned housing companies

The council has also taken 10 years to build up from its first involvement in housing delivery – pushing projects over the line that stalled in the 2009 financial crash. Until now, it has partnered with local housing associations to take on management of its stock. It first started managing its own private rent homes, and only now is it starting to build up to managing social homes and having an HRA.

“Let’s start small. Let’s get market rent first and learn lessons. Because the needs aren’t as varied,” he explains. “We’re very much not jumping in too far.”

Scale of need

While financial and practical requirements make it clear that councils will be unable to immediately build on the scale of the past, there is also an undeniable gap between what councils are building and the scale of housing need.

Many councils operating in levels of high housing need managed to complete only a handful of homes. Consider Hammersmith and Fulham, an inner London borough.

Its website cautions people seeking to add themselves to the waiting list that they may have to wait 10 years for a home. It completed 10 homes in 2022-23, although told Inside Housing it expects to build another 3,000 in the next five years.

Gerri Bird, councillor at Cambridge City Council, one of the top 10 council builders, says the problem facing councils is clear. On the one hand, she is passionate about this new generation of council housebuilding, as the council faces London-like pressures on housing affordability.

“Build, build, build is my motto,” she says. On the other hand, she says that the government is not giving enough grant to unlock what the council wants and needs to do. “That worries me, because we have all these people on the waiting list,” she says. “I’d love to give them all a house. But we just can’t do it.”

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