By Joe Locker, Local Democracy Reporter
The City Council says Nottingham will need the new Labour Government to bring in policy changes and a new financial model for it to have any hope of meeting ambitious new housebuilding targets.
Chancellor Rachel Reeves pledged to “get Britain building again” by bringing back compulsory national housebuilding targets in her first speech following the July 4 General Election.
The new Government hopes building 1.5 million new homes in England by July 2029 at the latest will kickstart the economy and bring down rents and house prices.
However, the plans have caused concern among cash-strapped councils across the country.
Local councils act as planning authorities by controlling and passing developments, and are usually developers themselves because they provide social housing.
Nottingham City Council was one of 20 councils which wrote to the Government following Reeves’ comments, warning that without action they “face a £2.2 billion budget black hole in housing budgets by 2028”.
Labour’s pledge to build 1.5 million new homes nationwide over the next four to five years will not be feasible given the scale of the financial pressures in the housing sector, the councils say, unless there is urgent intervention.
“We need a long-term plan for new and existing social homes, underpinned by a fair and sustainable financial model developed alongside councils and housing associations,” the letter says.
“Without this we will not be able to deliver our shared ambition to build 1.5 million new homes this parliament.”
They are calling for a roundtable meeting with Angela Rayner, the Deputy Prime Minister and Secretary of State for Housing, Communities and Local Government.
Speaking to the Local Democracy Reporting Service, Cllr Jay Hayes, executive member for housing at the City Council, said the authority faces a big challenge without support.
“Currently when we sell a [council] house through Right-to-Buy, we only get 40 per cent or less of that money back,” he said.
“And then we’ve got to build a brand new house, which costs tens of thousands more. So the maths does not add up there.”
Right to Buy is a nationwide policy originally brought in by a Conservative Government in 1980. It allows most council tenants to buy their council home at a discount.
The council says between 2019 and 2023, 988 social homes were bought from it through Right-to-Buy, while only 500 were built in their place.
Around 10,500 Nottingham people are currently on the council’s waiting list for a social home.
“It’s not just about that funding, it is about how we can use the Right-to-Buy receipts,” Cllr Hayes added. “Under the last Government we had to use it in five years, or we had to give it back with interest. For me, I don’t think it is fair.
“It is also looking at the costs of building and being able to get the planning. It is looking at ensuring those properties meet the green agenda.
“We do want to build many houses, but it is about ensuring a Government backs us to be able to do that.
“In Nottingham, because we have tight boundaries we have limited availability of land, which meant we couldn’t meet our targets.
“With the financial pressures councils are under, it is becoming more and more difficult for councils to build. That’s why we are going to the private sector, getting them to build a proportion of council houses within that. But the private sector has their challenges as well because it means less profits and more costs.
“I think next year will certainly be difficult because I think the finances aren’t there. Rather than saying you need to build ‘X’ amount, we need them saying where can you build? How much can you build? Where do you need supporting?”
A Ministry for Housing, Communities and Local Government spokesperson said the department will respond to the letter at a later date.
“We are committed to delivering 1.5 million new homes by the end of this Parliament, with the biggest increase in social housing and affordable housebuilding in a generation,” the department said.
“This government will also work in partnership with councils, housing associations and the wider sector to ensure we hit our ambitious target and build the homes Britain needs.”
The Conservative Government ditched a mandatory 300,000 new homes a year target in 2023, instead making it only ‘advisory’.
