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London’s social homes contribute nearly £6.9bn to the UK economy annually, new research finds
London’s social homes contribute almost £6.9bn to the UK economy every year, new research by the G15 has found.
The group, which represents London’s largest housing associations, said that the failure to address the capital’s housing crisis, “exacerbated by political uncertainty and financial instability”, is “starving Londoners and the UK of at least an additional £7.7bn annually”.
It said that a “relentless churn of housing ministers, all making a succession of short-term decisions on how rental income is calculated”, have made it increasingly difficult for associations to secure the long-term investment they need to build, while also investing in existing homes.
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The G15’s research is the first to focus on the whole of the capital which quantifies the economic and social contributions made by social housing, using Hyde and Sonnet Impact’s Value of a Social Tenancy.
Contributions range from rent savings to the value of increased job (£2.34bn) and education (£179.6m) opportunities, crime reduction (£649.3m), and savings to the NHS of £1.34bn.
In London, housing associations currently provide 289,000 social rent homes.
The findings show that each of these homes contributes an average of at least £23,777 in value annually, totalling more than £6.86bn every year.
Providing new social tenancies for the 323,800 households on London’s social housing waiting list would inject at least an additional £7.7bn a year into the UK’s economy, the research found.
The research also shows London’s top 10 boroughs for social housing value. Tower Hamlets tops the list with 25,230 social rent homes delivering a social value of nearly £600m annually.
Lambeth’s 18,370 social homes deliver a value of £436.8m annually, while Lewisham’s 18,215 homes represent a value of £433.1m.
In London, G15 data shows that its members are expected to start work on 1,769 affordable homes in London this year, down from 7,363 last year.
The G15 said that the Conservative government’s imposed 7% rent cap when coupled with inflation and interest rates is the “final nail in the coffin, forcing housing associations to drastically cut back on building despite the housing crisis”.
Fiona Fletcher-Smith, chair of the G15, said “time has run out” for the current government to “get its own house in order when it comes to social housing”.
She said: “Whoever forms the next government could immediately begin to address the housing crisis by applying consistency to areas like the rent settlement. This simple act would give housing associations the financial certainty we need to keep borrowing and investing in Londoners and the UK.”
Ms Fletcher-Smith explained that despite the “valuable contributions” that social homes make, “successive Conservative governments’ indecision means there is little room to grow for housing associations, their residents and London”.
The G15 chair added: “A few tweaks by the next government, at no cost to them, will help us get on with the job of maintaining existing and building new homes, all while helping revitalise and regenerate communities, address stigma and providing a springboard for people into education and employment.”
Earlier this year, research by the National Housing Federation and Shelter found that investing in social housing could add more than £50bn to the economy.
Inside Housing’s Build Social campaign is calling on political parties to commit to building 90,000 social homes per year in England.
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