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Councils given extra borrowing powers to deliver new homes

The government has announced the creation of new borrowing powers that will enable councils to build affordable housing.An increase in councils' housing revenue account borrowing cap will allow them to bid for an extra £300 million, which can be used to provide investment in affordable housing over the next two years.It is expected that up to 10,000 affordable homes could be constructed as a result of the move.Changes have also been made to council land sales rules, so more surplus and redundant land and property can be released to support local home construction.Councils wishing to apply for extra funding must demonstrate maximum value for money by including funds from the disposal of surplus assets and bringing forward their own land for new affordable housing.The government has given local councils greater powers by reforming the system for council house finance. Councils are now able to keep their rents and receipts from house or land sales, in return for taking more responsibility for housing in their area.Greater flexibility is being permitted for councils wishing to sell their land for new development. They are now able to sell their vacant land at below market value to a broad range of organisations if it is then used to build affordable housing.The government says its measures will enable councils to complement its affordable housing programme, which is set to provide 170,000 homes by 2015 and a further 165,000 between 2015 and 2018.Communities secretary Eric Pickles said: "We have untied the hands of councils so they can take more responsibility for housing in their area. "Councils have built more homes in the last three years than under the whole of the last government - 170,000 affordable homes have been delivered since 2010, and housebuilding is now at its highest level since 2007."In January, an independent review was launched to consider how councils could play a bigger role in providing housing for local communities. It is investigating whether councils are using their current powers to deliver new homes and how they could do more by collaborating with other organisations. 

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