We here a lot about "Generation Rent" and quite rightly. So many young and indeed not so young people pay very high rents and can only aspire to the home ownership their parents completely took for granted.
Building more houses is vital to try and gain some sort of sanity over houses prices and enable this generation to share that aspiration or at least live in rented property with long term leases and where landlords actually invest in maintaining properties. However the bigger scandal is that of homelessness and the lack of affordable rented housing for key workers and people on lower incomes.
The Government can borrow much more cheaply than the private sector (the NAO report on PFI schemes makes this abundantly clear) and yet for a whole generation, Councils have largely been prevented from house building by policy and a variety of rules and regulations designed to prevent councils from meeting this core social objective.
The Treasury Select Committee has spotted this and although the Government has made timid steps in this direction by lifting the HRA cap by a £1billion, the Committee has said they should go further. This intervention is welcome. The security of public funding, planned out over a 20 year period should give construction companies the chance to plan recruitment to meet new demands.
When local government builds new houses it doesn't need to worry about margins or shareholders, but it will save money on its homelessness budget. The Government needs to be bolder and lift the HRA cap completely. If it does not do this, 300,000 new homes a year is a mirage and homelessness will continue to spiral upwards.
The borrowing cap for housing should be lifted so councils can be “unleashed” and help build the homes the country needs, according to the Treasury select committee. Raising the cap “would have no material impact on the national debt, but could result in a substantial increase in the supply of housing”, MPs said