Council Housing

Jim McMahon Excerpts

Tuesday 27th October 2026 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

It is a pleasure to serve under your chairmanship, Sir Jeremy. I congratulate the hon. Member for North East Hertfordshire (Chris Hinchliff) on securing this important debate on the delivery of council housing. I appreciate his passion for the subject following the debate that he brought forward last September on the provision of council housing. I also thank all Members for their rich contributions. They really reflect the challenges that exist across the country.

Nearly 180,000 children are in temporary accommodation in this country, and over 1.3 million households are on local authority housing registers. Members across the House will agree that we cannot allow that to continue, because behind every one of those statistics is a person, a family and a child. The Secretary of State for Housing, Communities and Local Government, the Housing Minister and the whole Government are clear on our resolve and intention to tackle the issue. We are also clear that councils have a leading role to play.

Under the leadership of the Prime Minister, the Government are committed to delivering the biggest council house building programme since the post-war period. That level of ambition is necessary because of the scale of the challenge that we are facing. This Government are removing barriers and backing councils to use all the levers at their disposal to deliver safe and decent homes at a scale not seen for decades.

We have taken decisive steps to improve councils’ financial resources, capacity and capability to invest in new and existing homes, and the social and affordable homes programme funding is putting councils at the heart of that delivery. It is the biggest long-term investment in social and affordable homes in recent memory. Initial allocations under the programme were announced in August and, for the first time, three councils outside of London—Newcastle, Eastleigh and Cambridge—were awarded strategic partnership status. The Greater London Authority has also offered allocations of at least £6 billion to providers of social and affordable housing, with 60% going to local councils.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

Leeds is one of the biggest local authorities in England. We have 27,000 households on the waiting list for council housing, 5,000 of which are in priority need. So many constituents come to me saying that they just cannot afford private rented homes. The main issue is that there is just not enough council housing. I welcome the Government saying that they are building more houses, but there needs to be specific help for Leeds, including both more funding for land remediation and the purchasing of city centre developments that are unoccupied or under-occupied. What additional support can the Government provide for that type of housing?

[Jim McMahon]

Leeds city council is ambitious for its city and is a key member of the West Yorkshire combined authority. It is doing a lot of work, not just on housing but on bringing forward brownfield sites through growth and infrastructure funding to make sure that, as many Members have said, housing goes alongside that wider community infrastructure.

In addition to the funding that I have just mentioned, over £21 billion is still to allocate, which will be prioritised for social homes, particularly council homes. That reflects our commitment to increasing council house delivery. To further improve financial capacity, deliver new supply and invest in existing homes, we have committed to a 10-year social housing rent policy with a convergence mechanism. That gives councils much needed certainty on their income to enable them to increase and manage their housing portfolios efficiently and effectively.

[Jim Shannon]

We also need to remember that the Government are committed to building a million-plus social homes over the next period of time. Over the last 12 months, house prices in Northern Ireland have consistently risen by a greater rate than anywhere else in the United Kingdom. Housing rents are also going up. Will the Minister share the Government’s strategy to address the social housing need with the relevant Minister in Northern Ireland to ensure that we can learn something from the process that the Government are putting forward?

[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.