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News | Published October 03 2018

May: “Solving housing crisis is the biggest domestic policy challenge”

The prime minister’s hour-long and wide-ranging conference speech has been praised in most quarters as her best conference address as leader of the Conservative Party yet. Brexit aside, one of the most prominent areas of policy discussed was the housing market.

May went so far as to describe the housing crisis as “the biggest domestic policy challenge of our generation.” She began by outlining the legislation that the government has already introduced to help those seeking to get on the housing ladder, including scrapping stamp duty for most first-time buyers and other schemes such as Help to Buy.

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  • Describes the crisis as "the biggest domestic policy challenge of our generation"
  • Declares the party will scrap the cap at which councils can borrow against their Housing Revenue Account

Using her platform the prime minister announced a major new policy that should help shake-up the market for developers, builders, and buyers alike. May said that at present, “There is a government cap on how much [local councils] can borrow against their Housing Revenue Account assets to fund new developments.

May went so far as to describe the housing crisis as “the biggest domestic policy challenge of our generation.”

“It doesn’t make sense to stop councils from playing their part in solving [the housing crisis]. So today I can announce that we are scrapping that cap.”

The cap currently limits the the amount of money that a council can borrow against their property assets, and by scrapping it, should free up what could amount to a significant amount of money to build new homes. The responses from local government leaders and others involved in the sector have been almost wholly positive.

Jo Miller, chief executive of Doncaster Council, and President of Solace, the representative body for chief executives and senior managers working in the public sector, said of the policy announcement, “This is phenomenal news. Local government has wanted this for a generation. It gives us new tools and opportunities to deliver in our communities and is very welcome.”

More praise came from Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy, who described the announcement as “huge and welcome news.” He continued: “The abolition of the housing borrowing cap can transform council house building for the first time in 30 years and restore supply side failure.”

As the prime minister identified herself during her address, “We cannot make the case for capitalism if ordinary working people have no chance of owning capital.”

While the housing market is one that must be addressed by any government, for Theresa May and the Conservative Party especially, the issue carries extra weight. As the prime minister identified herself during her address, “We cannot make the case for capitalism if ordinary working people have no chance of owning capital.”

With home ownership at its lowest in the country in three decades, the Conservatives know that to fix this market is not just necessary for the country, but may well be necessary for them to win the ideological battles that have re-emerged between themselves and the resurgent socialism of the Labour Party.