We need to lift the cap on councils’ borrowing so they can help solve Britain’s housing crisis

With Britain’s housing crisis worsening by the day, and Londoners facing a housing catastrophe, we urgently need to maximise the construction of new homes. It is crucial that this includes new council housing.

In 1979 councils were building around a third of all new homes in the country. But by the end of the 1980s council house building had slowed to a trickle, and it continued to decline in subsequent decades. Private sector housebuilders never filled the hole in supply that was left when local authorities stopped building. Hence, the roots of the current housing crisis can be traced back, in a large part, to the decision by the Thatcher government to choke off council house building.

Thanks to reforms to local authority borrowing made at the end of the last Labour government, some councils are now building homes for the first time in decades. The reform, which gave local authorities ‘borrowing headroom’, was very welcome.