Calls have been made to unlock the “single most effective intervention in Cambridge” to fix our “broken” housing market.

The House of Commons Treasury Select Committee has called for the Government to remove the Local Authority Housing Revenue Account borrowing cap to enable councils such as Cambridge to build more council houses, according to an Autumn Budget 2017 report published today (January 22).

Those in favour argue that allowing councils to borrow more cash would give them the boost they need to build more houses. Nationally, the Government hopes to build 300,000 new homes per year.

Councillor Kevin Price, the Executive Councillor for Housing, said this step would be the “single most effective intervention” to fixing the city’s housing market.

Cllr Kevin Price said there is light at the end of the tunnel, but genuinely affordable housing has to be built now
Cllr Kevin Price said the measure could be the best way to address housing problems in the city

Cllr Price said: "I welcome the Treasury Committee Report. We, and councils from across the political spectrum, have consistently highlighted to the Government the important role councils could play in tackling the housing crisis in the country, and, of course, Cambridge City Council in Cambridge itself.

"The chief barrier to this is the artificial debt cap on our Housing Revenue Account, which prevents us borrowing enough to build in any significant numbers.

“It would also be the single most effective intervention in Cambridge to tackle the imbalance of the housing market in the city, which consistently drives prices upwards."

'This needs to be done as soon as possible'

Newnham councillor Rod Cantrill said it is essential to lift the cap, and it should be done “as soon as possible”.

Cllr Cantrill said: “We all know that the housing market in Cambridge and the surrounding area is broken.

"Residents can’t afford to rent, let alone buy in the city. Although the £70m of devolved funding Cambridge has received is allowing the council to build 500 council houses, this will only address part of the need.

"The scale of the need is highlighted by the some 2,500 households who are currently on the Housing Needs Register.

Rod Cantrill says the housing market is "broken"

“By lifting the cap on borrowing the government has imposed, Cambridge City Council would be able to borrow funds to build enough new council houses to meet this need. I will continue to call for the government to remove the cap as soon as possible so that Cambridge can build these much needed new homes.”

Commenting on the Report, Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, said: "The Chancellor pledged to ‘fix the broken housing market’, but the Government is going to find it very difficult to meet this ambition. The increase in the cap on borrowing for local authorities to build homes is a step in the right direction, but it doesn’t go far enough.

“The borrowing cap restricts the number of homes that local authorities could deliver. To achieve the Government target of 300,000 new homes per year, the cap should be abolished. The potential of local authorities to build should be unleashed.

“The Government’s commitment to increase public investment is welcome, but a revival in productivity also requires action from the private sector. The OBR expects a fall in private sector investment due to Brexit-related uncertainty. An agreement between the UK and the EU27 on ‘standstill’ transitional arrangements is therefore urgent."

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