Sajid Javid urges Chancellor to borrow money to solve housing crisis

Lizzy Buchan
Mr Javid says the Government should take advantage of record low interest rates: Getty

The Government should borrow money for hundreds of thousands of new homes to solve the growing housing crisis, Sajid Javid has said.

The Communities Secretary hinted at a major shift in Tory thinking as he suggested the Chancellor should capitalise on historically low interest rates to fix the broken housing market.

He refused to say if the move would feature in next month’s Budget but indicated that housing would form a key plank of Chancellor Philip Hammond’s announcements.

Mr Hammond has been urged by party colleagues to come up with some bold proposals as the Tories try to win over young voters who have flocked over to Jeremy Corbyn.

Asked whether there would be a new housing fund to build homes, Mr Javid told The Andrew Marr Show: “We are looking at new investments and there will be announcements.

“I’m sure at the Budget we’ll be covering housing but what I want to do is make sure that we’re using everything we have available to deal with this housing crisis.

“And where that means, so for example, that we can sensibly – you 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 absolutely be considering that.”

He added: “I would make a distinction between the deficit which needs to come down, and that’s vitally important for our economic credibility and we’ve seen some excellent progress, some very good news on that just this week. But investing for the future, taking advantage of record low interest rates, can be the right thing if done sensibly, and that can help not just with the housing itself but one of the big issues is infrastructure investment that is needed alongside the housing.”

Mr Javid, an outspoken critic of his party’s record on housebuilding, described the issue as “one of the biggest barriers to social progress in this country”.

He also dismissed reports that the Government was planning to relax protections on the green belt, which would likely have infuriated many Tory members.

Shadow Housing Secretary John Healey hit back at the claims, saying: “If hot air built homes, ministers would have fixed our housing crisis”.

He added: “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.

“Rather than set more targets they can’t meet, ministers should back Labour’s plan to build 100,000 genuinely affordable homes a year, including the biggest council housebuilding programme in more than 30 years.”

Mr Javid’s suggestion the Government could borrow money to build houses comes as ministers announced plans to tackle gazumping, where people who have already put down an offer on a property can be outbid by rival buyers.

In her Tory conference speech, Theresa May pledged to “dedicate” her premiership to fixing Britain’s housing crisis as she announced an extra £2bn for affordable housing, paying for with an additional 25,000 social homes.