By New research highlights the profound economic benefits of improving housing affordability in London, revealing that a 1% increase in affordability could generate an additional £7.3 billion in economic output over the next decade. This analysis, conducted through a new economic model, underscores the strong link between housing affordability and London’s productivity and growth.
Key Findings:
- Economic Gains: Enhanced affordability allows for greater household and business investment in productive activities, which supports job creation and future economic growth.
- Workforce Stability: Affordable housing can ease recruitment and retention challenges for employers by reducing the financial strain on workers living in or commuting to London.
- Homelessness Impact: With 1 in 50 Londoners currently experiencing homelessness and relying on temporary accommodation, improving affordability could substantially reduce this crisis and alleviate pressure on public services.
Broader Implications:
This research, jointly commissioned by London Councils, the Mayor of London, Trust for London, and the G15 group of housing associations, reinforces the argument for greater investment in affordable housing. It suggests that tackling the housing crisis could catalyse a virtuous cycle of economic and social improvements for London.
The findings emphasize the need for policymakers and stakeholders to address the housing affordability crisis not only as a social imperative but also as a strategic economic opportunity.
Cllr Claire Holland, Chair of London Councils, 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.”
The report – Estimating the Effect of Housing Affordability on Economic Productivity in the Greater London Area – can be found here.
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