New analysis has identified that significant economic growth can be achieved by making housing more affordable in London.
The research – commissioned by London Councils, the Mayor of London, Trust for London, and the G15 – has found that a 1% increase in housing affordability in the capital could bring a boost to economic output worth £7.3 billion over the course of a decade. This comes thanks to an economic model that identified the impact that housing affordability has on productivity and growth within the city.
With London currently being gripped by the nation’s most severe housing and homelessness crisis, at least one in 50 Londoners are currently homeless and living in temporary accommodation. By offering more affordable housing, not only could those people be offered homes, but employers within London could find it easier to attract and retain employees.
Alongside this, homes and businesses will be able to invest in more productive economic activity, leading to more jobs and future investment for economic growth.
London Councils Chair Cllr Claire Holland said:
“The chronic shortage of affordable housing in the capital is driving up homelessness and putting the brakes on London’s economic growth.
“Astronomical housing costs absorb a huge proportion of Londoners’ income, make it harder for businesses to recruit, and are a clear drag on productivity.
“As this important new research reveals, improving housing affordability in London would bring significant economic benefits, as well as helping those Londoners most impacted by the housing crisis. This is the latest evidence of why increased investment in affordable housing is so crucial. Tackling London’s housing pressures will boost productivity and help generate the economic growth we all want to see.”
Mayor of London Sadiq Khan also commented on the issue in a speech at the annual London Conference, saying:
“Our analysis shows that even a small change for the individual can produce something far greater for the collective. In fact, just a 1 per cent decrease in house prices could boost London's economic output by 7.3 billion pounds over a decade. In short, investment in building homes people can afford, will lead to the growth we need. That’s why, as well as doing everything I can from City Hall, I’ll continue to make the case for the national investment we need – for the benefit of London and the whole country.
“If there was ever a time for more public investment in housing then it’s now. And if there was ever a place to show how government still has the capacity to improve the condition of people’s lives, then it’s housing.”
Image credit: iStock
