The financial outlook for social housing budgets is beginning to improve, although significant challenges remain that could impact future housebuilding.
That’s according to a recent LGA survey of councils with housing revenue accounts (HRAs), which found that fewer councils expect to rely on reserves to balance their HRAs – with 46 per cent anticipating doing so in 2026/27, down from 72 per cent last year.
Confidence in balancing budgets has also increased, alongside a rise in councils reporting they can maintain and repair existing housing stock.
Despite this more positive picture, almost half of councils warned that ongoing budget pressures could affect their ability to build new homes.
The LGA said that, while improvements are welcome, financial pressures on HRAs remain “acute” and continue to constrain investment in new and existing housing.
The LGA is calling on government to provide further support to ease pressures on council housing finances. This includes measures to strengthen HRAs and enable councils to deliver more social housing, at a time when demand continues to rise.
An LGA spokesperson said councils are committed to maintaining and expanding social housing, but warned that without additional funding and long-term certainty, progress could stall.
The findings come amid wider concerns about the capacity of councils and housing providers to boost housebuilding and meet national housing targets, with financial constraints continuing to pose a significant barrier.