It is one of the great insanities of our age. The government can borrow money for the long term more cheaply than at any time in centuries. At the same time, councils and housing associations are screaming out for long-term funds to build the homes Britain desperately needs. Instead we are in gridlock, with the communities secretary Sajid Javid issuing a white paper that acknowledges the housing market is “broken”, and which admits we need to build as many as 275,000 homes a year compared with the 190,000 last year – but then only think of fixes that do not involve borrowing a penny.
Local authorities have excellent credit ratings and could use these to issue 30-year bonds on rates possibly as low as 1.5% to 2% interest. When private individuals borrow to do the same, with buy-to-let mortgages, they are praised for “investing for their future” and “securing their pension”. But if local authorities – who can borrow more cheaply than private individuals – try to do the same they are branded as irresponsible socialists.
