Hot on the heels of the Prime Minister’s announcement that councils will be allowed to borrow against their Housing Revenue Accounts, the Mayor of London this week awarded just over £1 billion for 11,000 council homes across the capital.
Given how the shortage of housing has risen up the political agenda these announcements are clearly very welcome, but delve a little deeper and many councillors believe longstanding issues still need to be resolved.
Most importantly, is the land there, and is there the capacity to build on it? As many developers appreciate, even though Londoners are happy in abstract with the notion of more homes, in practice that doesn’t always translate into cries of “Yes! In my back yard!”
Anyone looking to build council homes will still need to get planning permission, and that means persuading existing residents of the merits of a new council estate next door – or convincing residents on existing estates to make way for regeneration.
While Cratus is a believer in what local authorities can achieve for their communities, it can take great political expertise to obtain planning approvals, and council leaders will need to have the political will to make decisions that won’t always be popular.
Even armed with a planning approval, homes don’t build themselves. Already there is a shortage of skilled construction workers – builders, electricians, plumbers and so on.
Following Brexit, many councils believe that skills shortages will worsen, driving up construction costs and slowing down building work.
Added to this, after eight years of austerity, with the income they receive from the government more than halved, many councils now see their land as a potential solution to their funding problems.
They have started developing the land they own in order to generate profits to pay for services like care for the elderly. Can they afford to build subsidised council homes instead, or would this result in those services taking a hit?
Finally, if all we do is build new council homes at the expense of other homes to buy or rent, the housing shortage will stay the same.
The thousands of new council homes will be great for the lucky few who get to live in them, but high prices will continue to punish the many who are paying too much as things stand.
As John Myers of the campaign group London YIMBY says, “Do you really think homes would still be so expensive if we had four times as many? They would be affordable long before that.” In other words, don’t just build different homes, build more homes.
The cash injection for council homes is fantastic, but a new approach to building is probably still needed if we are to deliver all the homes that Londoners need.