A group representing London’s largest housing associations reckons that social homes in the capital contribute nearly £6.9billion per year to the national economy.
Slow down: housing associations are building one-quarter of the affordable homes in London that they built last year
The G15 group 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”.
Earlier this year, research by the National Housing Federation and Shelter found that investing in social housing could add more than £50billion to the economy.
But a report from G15 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.
The G15 research is the first to focus on the whole of the capital and quantifies the economic and social contributions made by social housing. Contributions range from rent savings to the value of increased jobs (£2.34billion) and education (£179.6million) opportunities, crime reduction (£649.3million), and savings to the NHS of £1.34billion.
According to website Inside Housing, in London, housing associations provide 289,000 social rent homes.
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The findings show that each of these homes contributes an average of at least £23,777 in value annually, totalling more than £6.86billion every year.
Providing new social tenancies for the 323,800 households on London’s social housing waiting list would inject at least an additional £7.7billion a year into the national economy, the research found.
In London, G15 data shows that its members are expected to start work on 1,769 affordable homes in London this year. That’s sharply down from 7,363 last year.
The G15 said that the previous 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 government to “get its own house in order when it comes to social housing”.
Addressing the housing crisis could begin by “applying consistency to areas like the rent settlement”, FLedtcher-Smith said.
“This simple act would give housing associations the financial certainty we need to keep borrowing and investing in Londoners and the UK.”
She said that “a few tweaks”, at no cost to government, “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.”
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