Councils could build up to 15,000 homes a year, report finds

Half of all councils in England could have their own housing company by 2020, according to the Smith Institute.

A report published by the think tank estimates there are currently around 150 local housing companies in England, most of which have been formed in the last few years.

The study says that, based on the current trend for councils to launch their own housing companies, this number could increase to 200 by 2020, covering just over half of all the local authorities.

It found that while most of these companies have ‘modest’ ambitions, averaging around 50 homes a year, there are larger housing companies in urban areas with major build programmes.

The report estimates council housing companies are currently completing around 2,000 homes a year, but this annual figure could rise to between 10,000 and 15,000 homes each year by 2022.

And it says that around 30% and 40% of new homes built by these companies are likely to be ‘affordable’, with a minority at the equivalent of social rented levels.

The report recommends the Department for Communities and Local Government establish a taskforce or a commission with the Local Government Association to look at how to maximise the potential of local housing companies.

It also calls on government to remove the caveat that ‘we want to see’ these companies offering tenants the Right To Buy (RTB).

‘It appears that local housing companies are not subject to the RTB or Right to Acquire, but the prospect that they might be is confusing and undermines investor confidence in local housing companies,’ the report states.

The chairman of the Local Government Association, Lord Porter said the Smith Institute report shows ‘that councils are taking the lead when it comes to delivering desperately needed homes for their communities’.

‘It’s crucial, though, that the government provides a stable environment to allow councils to invest in homes and get on with the job,’ said Lord Porter.

‘Councils are determined to lead the way in building new homes, and are leading local innovations finding different ways to make this happen. We’d like to see the government properly throw its weight behind our work and provide us with the tools to get on with the job.’

While the chief executive of the Chartered Institute of Housing, Terrie Alafat said the report highlights the extent to which ‘even in the absence of government funding, councils are finding ways to build new homes for the people in their communities’.

‘It clear that councils are having to work hard to find a way around a number of restrictions which prevent them from financing new genuinely affordable homes rather than being actively supported to do so.

‘With the right support, councils can once again become major contributors to building the housing we so desperately need. We would urge the government to create an environment which enables them to do that – giving councils more freedom and flexibility around thing like borrowing caps, rent levels and allowing councils to keep all of their right to buy receipts could be transformational.’