UK MPs have been calling for restrictions to be lifted on the ability of local councils to borrow, saying that public sector-backed housebuilding is essential if Britain is to reach its target of 300,000 new homes a year.
With the Prime Minister having pledged to fix the country’s broken housing market, the Commons Treasury select committee said that council housebuilding had to increase.
The committee also called on the Office for Budget Responsibility to produce a forecast about Brexit’s impact before the MPs are expected to vote on the conditions of the UK’s withdrawal from the EU.
The recommendations were part of the committee’s response to the Chancellor’s November budget, which planned to tackle the high cost of housing in the UK using measures such as reduced stamp duty for new homebuyers and a lifting of borrowing restrictions that affect council housebuilding.
Committee chair Nicky Morgan said that a current borrowing cap limits the number of homes that local councils can deliver. To meet the government goal of building 300,000 new homes per year, the cap needs to be removed.
Organisations like the Local Government Association, which represents councils, and the National Housing Federation, which speaks for housing associations, were doubtful that the goal could be achieved without additional measures.