5 November 2018

NFB: Healey is right, all councils need access to HRAs

The Independent reported that Shadow Housing Secretary John Healey MP, has called on ministers to ensure that all councils have housing revenue accounts (HRAs), which can allow them to borrow in order to build new homes.

The shadow housing secretary understands that some areas will entirely miss out on the opportunity to build more council homes. This was confirmed by Housing Secretary James Brokenshire MP, who confirmed that there are 160 councils without HRAs.

The rules around HRAs allow councils to have an account only if they already own at least 200 homes. However, councils have been encouraged to transfer their stock to housing associations since 1988.

The National Federation of Builders (NFB) agrees with Healey and calls on the Government to make sure all councils can build homes, especially as the 200-home threshold penalises councils who have supported previous policy changes.

Healey’s analysis identifies a major flaw with solutions to the housing crisis: delivery in practice. This is often overlooked for headlines and decision makers need to understand the reality of getting homes built and construction projects off the ground.

The shadow housing secretary understands the industry from the perspective of councils, but the NFB is not yet convinced that the Labour Party or the Conservative Party understand how homes get built.. Labour’s recently announced ‘planning review’ is nonetheless a positive first step in the right direction.

Richard Beresford, chief executive of the NFB, said:

“John Healey is absolutely right to identify the HRA barrier that many councils face. The Government must help ambitious councils who want to build more homes, but are currently unable to because they supported previous government policies.”

Rico Wojtulewicz, senior policy advisor of the House Builders Association (HBA), added:

“Understanding how the HRA works in practice is imperative, but we remain unconvinced that the planning process – the greatest barrier to increasing housing supply – receives the same nuanced consideration.”