May removes council borrowing cap

The borrowing cap for local councils to build new housing is set to be scrapped, potentially opening up billions of pounds of funding for new council housebuilding schemes.

In a move that has been long called for by many in the industry, and hinted at in previous Budgets, Theresa May announced at the Conservative Party Conference that councils will no longer be restricted when borrowing against the value of their social rent income.

May said: “There is a Government cap on how much can borrow against their Housing Revenue Account assets to fund new developments.

“Solving the housing crisis is the biggest domestic policy challenge of our generation. It doesn’t make sense to stop councils from playing their part in solving it, so today I can announce that we are scrapping that cap.”