Nottingham council house shortage worsened by building costs and borrowing freeze

Council housing in Nottingham (Nottingham City Council)
Council housing in Nottingham (Nottingham City Council)
By Joe Locker, Local Democracy Reporter

The building of new council housing in Nottingham to tackle a 10,000-strong waiting list is been held up by “exceptionally high” costs and the council’s decision to stop borrowing money.

Nottingham City Council currently owns 24,631 homes that are rented out to people in need of housing.

Over the last 20 years 2,663 new social homes have been built in Nottingham, but the authority says progress is being slowed by a series of barriers to construction.

The problems mean more than 10,000 people are now on the authority’s housing waiting list.

During a Housing and City Development Scrutiny Committee meeting on June 10, Mark Lowe, the head of housing and regeneration, said: “Costs have been exceptionally high in the building industry.

“We’ve had very high costs in relation to work, the cost of workers who work on buildings, but also materials, which have been much higher than normal inflation rates.

“Social housing providers have also had a lot of new, and not necessarily expected demands on their cash. Some of those are for very good reasons, we’ve had a national push to get energy standards higher.

“There are new decency standards coming in. And since the Grenfell Tower Disaster there has been a huge push to ensure fire safety standards, new cladding. All of those things cost an awful lot of money.

“They are all good things, but they cost a lot of money. That is money that was not in the development plans of many housing associations. So what they had to do was take money out of their developments in order to do things.”

Social housing and improvements to the current homes are typically funded using money from the council’s Housing Revenue Account (HRA), as well as Right-to-Buy replacement funds and Section 106 contributions, which come from developers.

In 2012 the Government allowed councils to borrow in order to invest in the delivery of housing, either through new builds or buying second-hand homes.

Since these changes the council has built 570 new homes for rent, and 351 more homes are currently being built.

A further 150 homes have been built under the ownership of either Nottingham City Homes (NCH) or an NCH registered provider.

The council also approved a further 24 homes on the former Oakdene Residential Home in St Ann’s.

But following the collapse of Robin Hood Energy in 2020, and the resulting appointment of an improvement board, the Labour-run council decided to adopt a ‘voluntary debt reduction policy’.

The council stopped all borrowing for investments, including social housing.

This “significantly reduced” the council’s ability to commit to more council house development or acquisitions, the authority says.

Although there are a number of other homes currently being built in the city, these were approved prior to the adoption of the policy on borrowing.

Furthermore, a total of 3,072 homes have been sold under the Right-to-Buy scheme, which allows tenants to purchase their council home at a discount.

Mr Lowe said the losses have been “very significant”.

In a bid to combat this, the council managed to buy 151 second-hand properties to add to its housing stock between 2019 and 2021.

In February 2024, the council also agreed to buy another 60 homes over a two-year period, on top of 37 homes from private developers.

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