The borrowing cap for local councils to build new housing is set to be scrapped, potentially opening up billions of pounds of funding for new council housebuilding schemes.

In a move that has been long called for by many in the industry, and hinted at in previous Budgets, Theresa May announced at the Conservative Party Conference that councils will no longer be restricted when borrowing against the value of their social rent income.

May criticised the current situation:

“Solving the housing crisis is the biggest domestic policy challenge of our generation. It doesn’t make sense to stop councils from playing their part in solving it.”

Details on when and how the cap on borrowing will be removed are expected to be announced in the Budget later this month. The Government confirmed following May’s speech that the cap would be removed “as soon as possible.”