Labour consider lifting caps on council borrowing so they can build more homes

The person in charge of Labour’s housing policy review – Sir Michael Lyons – has floated proposals that would see councils’ borrowing caps lifted so that they could build more homes.

Talking to the Guardian, Lyons said that one of the core ways to explain Britain’s current housing crisis was delays in lease of land:

“The central issue is how do we release more land in this country – a country that has developed urban containment to ritualistic proportions and in a country that devotes more land to golf courses than it does to homes. It is a national problem that we collectively have to sort out.

This belief in urban containment is rooted in a Victorian view of cities that they should not grow, they should not spread and they are full of problems when most of us would acknowledge that the future of the UK economy depends to a large part on the dynamism and growth of the cities.”

To allow cities to grow, Lyons thinks that communities should have their voices heard in the planning process, but that this doesn’t mean they should have the ability to veto proposals when there are periods of extreme housing shortage.

Alongside this proposal, this inquiry team have found in the initial stages of their investigation that it’s time to free councils from unhelpful borrowing constraints, as Lyons explains:

“In England there is a specific cap on the council Housing Revenue Account (HRA). The overwhelming weight of the evidence that has come to us from public and private bodies, says ‘for goodness sake lift the HRA cap’.”

He goes on to say that without making such changes to our housing market, the future doesn’t look good:

“We are not serving our children and grandchildren well. We are not leaving them an adequate legacy of homes. Every community has a right to a voice about where new development takes place and what form it takes. What they cannot have is a right to a prohibition on the building of homes. That is simply intolerable in the common interest.” 

The Lyons Commission will be published in full in September of this year.