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London councils and the Mayor: give us the freedom to build more affordable homes

Lambeth Labour leader Cllr Lib Peck has joined the Mayor of London Sadiq Khan and 20 other London council leaders to demand that the government use this week's budget to give us the power to build more genuinely affordable homes. 

While Lambeth has recently exceeded its target for building affordable homes and is delivering the biggest social house building programme in a generation, there is still much more to do to tackle the housing crisis. It is time for the government to stop tying the hands of local authorities and the Mayor and to give them the powers and funding to deliver the genuinely affordable homes that Londoners need. 


Mayor of London Sadiq Khan visits new council homes at Vauxhall City Farm with Cllr Lib Peck, Cllr Matthew Bennett and Florence Eshalomi AM.

Dear Chancellor 

As Mayors and council leaders in London, we know that we will only ever stand a chance of getting London’s housing crisis under control if Government gives us a leading role in building new genuinely affordable homes – including council homes - and significantly increased housing funding which all experts agree is desperately needed.

Councils have a long and proud history of building homes in London. Together, London government built the mixed communities that are still so essential to our economic and social success today. At their peak, councils pushed homebuilding to levels not seen during any other post-war period. In the two decades to 1980, they built nearly two-thirds of homes in London.

Councils’ role in building homes was abruptly ended by the Government in the 1980s. Although many councils have begun to build again in recent years - and City Hall is now funding them to do so - we are severely limited in what we can do by the Government. Archaic national rules, insufficient investment, and powers too weak to make a real difference mean that London councils today account for less than five per cent of new homebuilding in the capital.

This Government has expressed a desire to fix London’s housing crisis - just last week the Prime Minister described it as her “personal mission”. The Budget this week is your chance to match words with real action:

  • Give councils the freedom to fully invest in building new council housing. The historic hangover of arbitrary borrowing caps within councils’ Housing Revenue Accounts is artificially limiting their ability to do so. Likewise, current restrictions on how and when councils can spend their Right to Buy receipts mean they are unable to make best use of these funds to replace homes sold. Greater freedom on both these fronts would enable councils to plan for and deliver many more homes.
  • Councils, housing associations, and City Hall need a step change of investment in affordable housing and infrastructure. GLA analysis initially suggests meeting housing need in London would need Government investment to increase five-fold from the current £500m a year, alongside a long-term commitment to greater support for infrastructure. At the very minimum, you need to start by increasing investment back to the levels you inherited which reached £1.75 billion in 2009/10.
  • Councils and City Hall must be empowered to bring forward land for new affordable homes. A ready supply of land at reasonable values is essential to underpinning a new council homebuilding programme on the scale we need. Land values in London have soared to £29.1m per hectare – nearly 14 times the rest of England – and land assembly powers are ill-suited to bringing forward land quickly. You should use this Budget to strengthen our ability to assemble land under existing legislation, and to support further reform to give us a truly effective set of powers in the future.

We have a huge ambition to build more council homes in London – and Londoners have a desperate need for us to do so. We are using our existing powers and resources to their fullest extent, but despite our enthusiasm to build more council homes, our hands are tied behind our backs by your rules.

Without Government supporting a step change in our freedoms, resources, and powers, London’s housing crisis will continue with no end in sight. The Prime Minister committed during her recent conference speech to “getting government back into the business of building houses”, including “a new generation of council houses” – but so far her actions have fallen dramatically short of what is needed.

We urge you to use your Budget this week to support a new generation of council homebuilding, and allow us to build a city that works for all Londoners.


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