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Government to lift HRA caps in high-demand areas
Councils in high-demand areas are to have their Housing Revenue Account (HRA) borrowing caps lifted, the chancellor has announced.
Philip Hammond unveiled the policy while delivering a flurry of new housing measures in his Autumn Budget today.
Other councils have also approached the Department for Communities and Local Government with proposals for deals of their own.
The Treasury will provide a combined total of £1bn extra borrowing headroom for council housebuilding up to 2021/22.
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According to the Budget documents, 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 councils respond to the offer and “consider whether any further action is needed”.
A report commissioned by the Association of Retained Council Housing and the National Federation of ALMOs published last week said lifting HRA borrowing caps would deliver at least 15,000 new homes.
Mr Hammond also announced that the government will introduce new measures to ensure that local planning authorities give permission for more developments for first-time buyers and affordable renters.
In May, previous housing minister Gavin Barwell said the Conservatives would invite “innovative” councils to bid for increase borrowing headroom.
And former chancellor George Osborne offered councils £300m of additional HRA borrowing capacity in 2014.
However, that programme was wound down after £220m was allocated to build just 3,000 homes - well below the government’s 10,000 target.
Update: at 14.34pm 22/11/17: The story was updated to include more information.
KEY BUDGET MEASURES AT-A-GLANCE
- Investment of £44bn in housebuilding in capital funding, loans and guarantees over the next five years to boost supply of skills, resources and land
- Commitment to be building 300,000 homes a year by mid-2020s
- £1.5bn package of changes to Universal Credit announced. This includes the scrapping of the seven-day waiting period at the beginning of a claim, making a full month’s advance available within five days of a claim for those that need it and allowing claimants on housing benefit to continue claiming for two weeks
- Lift council borrowing caps in "high-demand areas"
- A £125m increase over two years in Targeted Affordability Funding for Local Housing Allowance claimants in the private sector struggling to pay their rent
- New money into Home Builders Fund
- Extra £2.7bn for Housing Infrastructure Fund
- Invest £400m in estate regeneration
- £1.1bn on unlocking strategic sites
- Stamp duty for first time buyers on properties worth up to £300k will be axed, while the first £300k on properties worth up to £500k will also be scrapped
- Three new Housing First pilots announced for West Midlands, Manchester and Liverpool
- Councils to be given the power to charge 100% council tax premium on empty properties
- Government will launch a consultation to barriers to longer tenancies in the private rented sector
- £38m for Kensington & Chelsea Council for mental health and counselling services, regeneration projects in areas surrounding Grenfell Tower and a new community space
- Invest in five new garden towns
- £125m increase in Targeted Affordability Funding for Local Housing Allowance claimants in the private sector struggling to pay rent
