Housing crisis: we will borrow to invest in new homes, says Sajid Javid

The government will partially reverse its austerity doctrine by borrowing to invest heavily in new homes and associated infrastructure to tackle the housing crisis, Sajid Javid has said.

The communities secretary revealed there could be an announcement about the move in next month’s budget.

Javid drew a distinction between tackling the deficit and using low interest rates to invest in infrastructure, an idea more associated with Jeremy Corbyn’s Labour party.

He said there was an urgent need to build up to 300,000 homes a year. “We have a housing crisis in this country, I’ve been very open about that, the government has been very clear about that, and there’s a lot that needs to happen,” he said.

Javid said on BBC1’s Andrew Marr Show that the aim was for “a big increase in all types of home”, including social housing, so-called build-to-rent properties and shared equity homes.

“We are looking at new investments, and there will be announcements – I’m sure the budget will be covering housing,” he said.

“What I want to do is make sure that we’re using everything that we have available to us to deal with this housing crisis. Where that means, for example, that we can sensibly borrow more to invest in the infrastructure that leads to more housing, take advantage of some of the record low interest rates that we have, I think we should be absolutely considering that.

“I would make a distinction between the deficit, which needs to keep coming down, and that’s vital for our economic credibility. But investing for the future, taking advantage of record low interest rates, can be the right thing if done sensibly.”

While councils “have a big part to play” in the plan, as do housing associations, the “biggest role” should be taken by the private sector, Javid said.

Asked if Philip Hammond, the chancellor, was signed up to the idea of more investment in housing, Javid said: “Let’s wait and see what happens in the budget.”

Making a distinction between everyday government spending and the need for new infrastructure, for example to assist new homes to be built, is a notion which has been argued by Labour. The opposition party has called for a big boost to long-term economic investment.

However, Javid indicated the government would not relax protections for the green belt.

“I don’t believe that we need to focus on the green belt here, there is lots of brownfield land, and brownfield first has been a policy of ours for a while,” he said.

He said one big issue was density, noting that even London was less densely built up than many other European cities.

The government’s recent efforts to help tame the housing market have brought limited success. The help-to-buy scheme has been accused mainly of raising property prices even further.

At the Conservative party conference this month, Theresa May announced an extra £2bn for affordable housing. But the planned centrepiece of the prime minister’s speech was instead dominated by an intruder and her cough.

Labour’s shadow housing minister, John Healey, said the government should pledge to invest in more council homes rather than “set more targets they can’t meet”.

He said: “If hot air built homes, ministers would have fixed our housing crisis. Any promise of new investment is welcome, but the reality is spending on new affordable homes has been slashed since 2010 so new affordable housebuilding is at a 24-year low.”