Newham's mayor welcomes end to borrowing cap for building council homes
PUBLISHED: 09:00 06 October 2018
Newham's mayor has responded to the announcement that a borrowing cap on building council homes will be scrapped.
In a speech at the Conservative Party Conference last week, prime minister Theresa May announced she would be getting rid of a cap on the amount councils can borrow to build new homes.
Rokhsana Fiaz, who has been calling for the cap to be lifted, welcomed the announcement.
On Twitter, she wrote: “At long last, while we still need to wait on the detail, today’s announcement by the PM is great news and equals homes, homes, homes.
“But they have to be genuinely affordable for folk in Newham who are being squeezed due to high rents. We also need an end to right to buy too.”
Council housing is ringfenced in a budget, known as the Housing Revenue Account (HRA). The HRA gets its money from rents and service charges from tenants, and spends it on housing. Councils are able to borrow within their HRAs, but currently, the amount they can borrow is limited. Councils say this limits how much they can spend on building new homes.
With the cap lifted, the amount borrowed by councils is expected to soar.