London’s councils – like their counterparts across the country – have been discouraged from getting involved in housing supply since the 1980s. In the decades since then, almost all housing has been developed by large housebuilders and to a lesser extent, housing associations.

But this model is not able to deliver all the housing – and particularly the social rented and other genuinely affordable homes – that Londoners need. Homebuilding has consistently fallen below targets, and an increasing number of Londoners are unable to afford to buy or rent on the open market.

The Letwin Review’s emphasis on diversifying supply to speed housing delivery is therefore welcome. Councils can play a crucial role in achieving that ambition.

Now, in the face of significant political and economic uncertainty, two-thirds of London’s councils are starting to build homes again. Yet the potential for council involvement could be much greater. Analysis by Centre for London suggests that London’s boroughs could deliver 37,300 homes over the next five years, but restricted access to funding hampers their ability to do so.

The Mayor of London is using his power to support them, particularly through his new Building Council Homes for Londoners programme, but going further will require Government action.

To support and encourage councils to deliver at scale, Government should allow councils to borrow to build and to mix funding more flexibly.

Two areas require urgent action: first, the Government should release the borrowing caps for councils, allowing prudential borrowing against their council housing rental income; second, they should relax the restrictions on combining Right to Buy receipts with other grant funding and on the time period during which homes must be replaced.

The Government must recognise the role that councils can play in building more affordable housing in its forthcoming Social Housing Green Paper, and when considering the final recommendations of the Letwin Review.

SIGNED

James Murray, Deputy Mayor, Housing and Residential Development, Greater London Authority

Councillor Darren Rodwell, Executive Member for Housing and Planning, London Councils (Labour)

Councillor Kim Taylor Smith, Deputy Leader and Lead Member for Grenfell & Housing, The Royal Borough of Kensington and Chelsea (Conservative)

Councillor Ruth Dombey, Leader of the Council, London Borough of Sutton (Lib Dem)

Ben Rogers, Director, Centre for London

Councillor Emina Ibrahim, Deputy Leader and Cabinet Member for Housing and Estate Renewal, Haringey Council (Labour)

Lord Kerslake, Chair, Be First (Crossbench)

Tom Brake MP, Carshalton and Wallington (Lib Dem)

Terrie Alafat CBE, Chief Executive, The Chartered Institute of Housing

Sian Berry, Chair of the Housing Committee, London Assembly Member (Green)

Tom Copley, Deputy Chair of the Housing Committee, London Assembly Member (Labour)

Caroline Pidgeon, London Assembly Member (Lib Dem)

Helen Hayes MP, Dulwich and West Norwood (Labour)

Siobhain McDonagh MP, Mitcham and Morden (Labour)

Lord Beecham (Labour)

Dr Janice Morphet, Visiting Professor, The Bartlett School of Planning, University College London

Pat Hayes, Managing Director, Be First

Colm Lacey, Managing Director and CEO, Brick by Brick

Councillor Leo Pollak, Cabinet Member for Social Regeneration, Great Estates and New Council Homes, London Borough of Southwark (Labour)

Councillor Alison Butler, Deputy Leader, London Borough of Croydon (Labour)

Councillor Steve Curran, Leader of the Council, London Borough of Hounslow (Labour)

Councillor Richard Watts, Leader of Islington Council (Labour)

Philip Glanville, Mayor of Hackney (Labour)

John Biggs, Mayor of Tower Hamlets (Labour)

Councillor Muhammed Butt, Council Leader of the London Borough of Brent (Labour)

Councillor Liz Green, Council Leader, Royal Borough of Kingston upon Thames (Lib Dem)

Councillor Lib Peck, Council Leader, London Borough of Lambeth (Labour)

Councillor Keith Ferry, Deputy Leader of the Council; Regeneration, Planning & Employment Portfolio Holder, London Borough of Harrow (Labour)

Councillor Georgia Gould, Leader, London Borough of Camden (Labour)

Councillor Danny Thorpe, Leader, Royal Borough of Greenwich (Labour)

Damien Egan, Mayor of Lewisham (Labour)

Councillor Clare Coghill, Council Leader, London Borough of Waltham Forest (Labour)

Rokhsana Fiaz, Mayor of Newham (Labour)

Councillor Adele Morris, Deputy Chair, LGA Environment, Economy, Housing and Transport Board (Lib Dem)

Sir Steve Bullock, Former Mayor of Lewisham and London Councils Housing Lead