SUPPORT IS GROWING FOR LABOUR’S ALTERNATIVE TO AUSTERITY

THE National Housing Federation says the Government can provide a fast and wide-ranging boost to the economy by investing in new affordable homes.


Investment in affordable housing would assist people languishing on housing waiting lists and provide a significant shot in the arm for sustained economic growth.

Calculations by the Federation show that an investment of £1 billion in building affordable homes has the potential to:

• Deliver up to 25,000 new homes for social rent, affordable rent and affordable home ownership

• Create as many as 37,000 jobs in the construction industry as well as 150,000 jobs in the wider supply chain, saving the taxpayer over £700m in Jobseekers Allowance and Housing Benefit payments and generating an additional £500m in income tax

• Contribute up to £11bn into the wider economy.

FAST IMPACT OF INVESTMENT

The economic benefits of investing in housing will be felt swiftly. The investment can be introduced and administered by the Homes and Communities Agency and delivered through existing housing association partners within four years.

The timescales involved are much shorter than for large scale infrastructure work. The Federation cites the Impact Assessment for HS2, which uses the year 2037 as the point for demonstrating the extent of economic benefits.

By comparison, Government figures show that over half of major residential planning permissions are decided upon within 13 weeks. Similarly, the build time for affordable housing projects is much shorter than for many other infrastructure projects. Homes are usually completed within two years. So, allowing for land assembly and site preparation, the growth illustrated above could be achieved within four years.

With a growing emphasis on the use of public land and increasing innovation being shown by local authorities, the federation believes that there is reason to believe the speed and scale of delivery could be improved further.

OTHER ECONOMIC BENEFITS OF NEW HOMES

The Federation points to a range of other positive economic impacts derived from investment in housing which are more difficult to quantify:

• There is a positive link between affordable housing supply and private housing completions. Affordable housing can encourage developers to bring forward sites and help improve their viability.

• The conversion of land to residential use can increase its market value. This will be immediately realised where homes are for sale. Where they are for rent, the greater asset value can be used to support borrowing for further investment.

• Increasing housing supply can also improve labour market dynamics, allowing people to move home to take jobs, improve skills and widen employment opportunities.

• Affordable housing can help remedy wider social and health costs and reduce burdens on public spending as people are given opportunities to find a home more suitable to their needs.

• Public investment offers greater benefit to those on lower incomes than to those who are well off. This is especially relevant for investment in affordable housing. This can mean that people will have more disposable income after housing costs, which in turn boosts spending in the local and national economy.

With increasing support for Labour’s demands for economic growth, it remains to be seen how long the Tory-Lib Dem Government holds the line on its disastrous austerity programme.