The abolition of the Housing Revenue Account (HRA) borrowing cap could enable councils to take on up to £15bn extra debt to build 100,000 new homes, according to property adviser Savills.

Local Government Association Conservative group leader, Cllr James Jamieson, said the cap had ‘hampered the ability of councils to play a leading role in tackling our chronic housing shortage’.

London Councils’ executive member for housing and planning, Cllr Darren Rodwell, added: ‘Lifting the HRA borrowing cap and allowing prudential borrowing will make it far more financially viable for local authorities to invest in new housing.’