Council Housing

Ayoub Khan Excerpts

Tuesday 27th October 2026 Westminster Hall

[Ayoub Khan (Birmingham Perry Barr) (Ind)]

It is a pleasure to serve with you in the Chair, Sir Jeremy. I thank the hon. Member for North East Hertfordshire (Chris Hinchliff) for securing this debate and for presenting a very persuasive argument.

One of the biggest casework inquiries that I get in my constituency concerns the shortage of housing. Birmingham, which has the largest council in Europe, has an enormous housing issue—just look at the stats. In the west midlands region, we have 7,500 homeless families living in temporary accommodation, including 15,000 children. That has an impact on families and the children, who often live many miles from their school, with parents struggling to maintain their jobs because they have to escort their children to school. It will have a dramatic effect on our future generations. Birmingham has the youngest community, and I fear the impact that a lack of affordable homes will have on our next generation.

There are 65,000 families on the social housing waiting list. I am sure the Minister will say that the West Midlands combined authority has received somewhere in the region of £400 million to develop and build 3,000 additional homes, which of course is welcome, but when we contrast the numbers with the requirements, it really is a drop in the ocean. There will also be private developers, but one of the biggest issues that I see and that my constituents feel is that it is not just about building homes anywhere just to meet the quota, but about building communities and ensuring we have the right infrastructure: GP surgeries, medical care facilities and local shopping centres. A whole infrastructure needs to be thought of.

Planning is another big issue. The Labour Government often say they champion devolution and localisation and want local people involved in decision making. However, Birmingham is being asked to be anti-devolution, because planning powers could be given to the regional mayor. If that happens, it will take away that community on the ground who want homes where they fulfil all the criteria.

May I quickly ask the Minister a question? I know we have limited time. The Perry Barr Village was developed at a cost to taxpayers of £700 million. It was sold to Legal and General at a loss to the taxpayer of £350 million. Will the Minister inquire into what happened with that loss of £350 million to Birmingham taxpayers?

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[Jim McMahon]

The hon. Gentleman makes a very good point about the different approaches across the UK and how we can all learn from each other on what works, as well as learn from the areas where it perhaps did not go quite as planned. I will make sure that I pass his comments on to the Housing Minister to have conversations across Governments. 

We have also provided greater certainty on future costs associated with the decent homes standard and the minimum energy efficiency standards. We have allocated more than £1 billion through the warm homes social housing fund to improve the energy efficiency of social homes. Quality matters, as rightly outlined by my hon. Friends the Members for Norwich North (Alice Macdonald) and for Cannock Chase (Josh Newbury).

In addition to revenue, we know how important borrowing and the capacity to borrow are for councils’ delivery plans. Since 2023, a preferential borrowing rate has been available from the Public Works Loan Board for council house building. This rate will be extended and we will be announcing more details in due course.

We continue to work closely with councils and the wider sector to understand the remaining barriers to council house building and investment, including the impact of the housing revenue account debt and borrowing rates. We have also increased the threshold at which councils must open a housing revenue account from 200 homes to 1,000 homes. That is enabling small councils to deliver more homes without incurring additional operating costs.

We have also heard from councils that workforce shortages, skills gaps and capacity pressures will constrain their abilities to build. That is why we are investing a further £46 million over the next three years through capacity to build funding, on top of the £17 million already invested since 2025. That will help councils develop an ambitious pipeline, strengthen specialist housing capacity and make the most of the Government’s wider investment in council house building. These gaps have been identified by Members in the debate today, including the hon. Member for Camborne and Redruth (Perran Moon) and my hon. Friends the Members for Hexham (Joe Morris), for Portsmouth North (Amanda Martin) and for Truro and Falmouth (Jayne Kirkham).

Finally, we are taking decisive action to reform the right-to-buy scheme, which has acted as a break on council confidence to invest in new social housing for too long. We are reforming the scheme to ensure that more homes are built than lost, while maintaining an important route for social housing tenants to own their own homes, which was mentioned earlier by my hon. Friend the Member for Amber Valley (Linsey Farnsworth).

My right hon. Friend the Housing Minister is at this very moment in the Bill Committee, debating the detail of our reforms. The Social Housing Bill builds on the reforms to cash discounts that we implemented in 2024 to ensure that more social homes are protected, while removing powerful disincentives to build. Notably, we are tightening the eligibility requirements and exempting newly built social housing from the scheme for 35 years to ensure that homes are not sold before councils have recovered their investment.

[Ayoub Khan]

The Minister will have heard me talk about the £400 million being invested through the regional authority for 3,000 homes. I contrast that with the more than £700 million invested of taxpayer money in the Perry Barr athletes’ village, which was then sold at a loss to the taxpayer of £350 million. Can the Minister assure me that that matter will be investigated?

[Jim McMahon]

Today is not about getting into the rights and wrongs of individual programmes at local authority level. The hon. Member and I have had many conversations about Birmingham city council in the past and I am sure that will continue. The matter here today is how central Government ensure that we have the framework, the incentives and the funding to get councils building council homes and social homes in their area.

In addition, we have enabled councils to retain 100% of receipts from right-to-buy sales and provided greater flexibility on how those receipts can be used. That includes permitting councils to combine receipts with grant funding to unlock capacity for house building.

These measures are already bearing fruit. Councils delivered around 10,600 homes in 2024-25, which is the highest level since current records began in 1991-92. Our package of right-to-buy reforms is estimated to deliver a net gain of around 18,000 social homes over the next 10 years, compared with a pre-reform baseline of a loss of 26,000 homes.

My hon. Friend the Member for Doncaster East and the Isle of Axholme (Lee Pitcher) mentioned empty homes. We are strengthening powers to bring empty homes back into use by reforming empty dwelling management orders. We are reducing the period for which a property must be empty before it becomes eligible from two years to six months under that programme.

We know that we must go further and faster to deliver the good-quality, affordable homes that people need. We also know that councils share that ambition. The Government are committed to backing councils to build at a scale not seen for decades, and to build the right homes in the right places. We will continue to work with all levels of local and regional government to turn that ambition into homes and better outcomes for local people, so that everyone across the country has access to a home that is decent, secure and affordable.