Just 4% of homes built under Labour’s council housing ‘comeback’ will be council-owned. ‘It’s a con’

Just 4 per cent of homes built as part of Labour’s £10bn pledge to kickstart a “historic council housebuilding comeback” will be built by local authorities,The Independent can reveal.

Announcing the first wave of funding from the £39bn Social and Affordable Housing Programme (SAHP) on Tuesday, prime minister Andy Burnham said: “Councils built this country out of a housing crisis once before. Backed properly, and trusted to get on with it, they will do it again.”

However, of the 33 partners allocated funding, only three are local councils. An analysis of the figures show they are set to build an estimated total of 2,811 of the 73,600 homes slated for delivery – just 3.82 per cent.

These authorities – Cambridge, Newcastle and Eastleigh – will receive £392.2m of the £9.58bn funding, equating to around four per cent. The majority of the other 30 partners are non-profit housing associations such as Clarion, Orbit, and Places for People.

Shadow housing secretary James Cleverly labelled the announcement a “con”, and said “Labour’s so-called council house programme is already unravelling.”

“The homes won’t have to be delivered until 2039. The funding has been backloaded to fall outside the Spending Review so future generations have to pay for it. And now we learn the vast majority won’t even be council houses,” he told The Independent.

“This whole announcement is a con. Fewer homes will be delivered than previous programmes in this Parliament as social rent is more expensive. Labour have actually scaled back their housing plans and expect us to thank them for it.”

The housing associations chosen will still be bound to the government’s affordable and social housing targets, and will take in tenants from council house waiting lists. However, the homes will be legally owned and operated by them rather than local authorities.

Neither the government nor Homes England, which administers the programme, has shared how the partners were selected.

Liberal Democrat Housing spokesperson, Gideon Amos MP, said the announcement was misleading.

He said: “For years, prospective buyers were cheated by the myth of affordable housing under the Conservatives and now Andy Burnham is dressing up this funding injection as a council housing renaissance, when the numbers tell a very different story.”

“Council housing was invented by a liberal government, and today Liberal Democrats are committed to building 150,000 council houses and social rent homes per year to genuinely realise a fair housing system.”

The £10bn funding comes after Mr Burnham pledged to oversee the “biggest council housebuilding drive since the postwar period” shortly before becoming prime minister in June.

During the postwar peak in the 1970s, English local authorities built an average of 103,000 homes a year. By contrast, in the five years to 2025, they built just 2,200 annually.

Experts warn that there remain many barriers to councils building their own housing stock, with roughly 90 per cent of local authorities legally or financially blocked from doing so.

Nearly half of all housing authorities own no stock at all, having disbanded their building operations after transferring ownership to housing associations between the 1980s and 2010s.

Meanwhile, £31.8bn in historic housing debt is shackling the local councils that can still build, costing them around £1bn a year on interest payments alone. Repayments on the debt were supposed to begin in 2012, but it has instead risen by nearly £3bn as emergency rent measures, spending on safety repairs, and Right to Buy sales tanked revenues. This means many are unable to take on further debt to fund new projects.

Official data shows that while councils added 10,074 homes to their portfolios in in 2024/25 – roughly half of which were new build – they lost 10,298, representing a net loss of 224 homes. Around 7,600 losses were through Right to Buy sales.

Earlier this month, local leaders and house builders told The Independent that increased costs in the sector and a lack of support from central government were stifling ambitions to build more council homes.

Housing campaigners have called on the government to do more.

Sarah Elliott, chief executive of housing charity Shelter, said the government must use the Autumn Budget to remove the financial obstacles blocking many councils from building their own homes.

“Local authorities still face major barriers to getting spades in the ground, from mountains of historic housing debt to a lack of low interest loans for building. But history shows us we can only deliver the large number of social rent homes we need when councils are able to build,” she said.

However, she added that the latest announcement “strikes the right balance for the initial phase of allocations between the need to build social homes now and delivering more council-built social rent homes”.

An MHCLG spokesperson said: “We have not wavered in our ambition to get councils building at scale again. The funding is the first step in our £39 billion commitment to back a new era of social, affordable and council housebuilding, building on the highest level of council home delivery since current records began and unlocking thousands more homes in the years ahead.”