London needs more investment to help address the housing crisis. Boroughs are taking action in this area already, using their own resources to deliver new homes and working with partners in the private and third sectors to help support major developments in their areas.
For much of the postwar era, local authorities were major builders of homes. London’s councils are now responsible for around 400,000 homes. Following recent reforms, they now have the freedom to manage their housing stock through self-financing, and to borrow against their housing assets to build new council homes for the first time in a generation. However, their ability to borrow within the Housing Revenue Account remains strictly capped by the Treasury.
Other constraints which inhibit boroughs’ ability to invest in new homes include rules on the reinvestment of right to buy receipts and bureaucracy around general fund investment. The New Homes Bonus rewards local authorities for supporting new housing delivery, but this has largely been funded by reductions to core local government funding and its impact is uneven across London.
London Councils has been at the forefront of the debate over housing investment in recent years, including lobbying for the cap on borrowing to be removed, supporting powers to bring public sector land on stream for housing. Links to our publications and consultation responses on this issue can be found on this page.