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The economic impact of building social housing

NHF Social Homes

New research from Shelter and the National Housing Federation shows that building 90,000 social rented homes would add £51.2bn to the economy.

Published: 27/02/2024

Most of this impact would happen quickly – £32.6bn would be generated within a year of building the homes, supporting almost 140,000 jobs. Within three years, the programme would break even, with the wider economic benefits surpassing the upfront cost of building, largely by boosting the construction industry.

The economic benefits continue over the longer term, through the management of more social homes, savings on housing benefit, and wider benefits including reduced homelessness, increased employment, and improved healthcare.

Within 11 years the initial government funding to build the homes would be fully paid back. Over a 30-year period, building 90,000 social homes results in a £12bn profit for the taxpayer.

Read the full report

Ian McDermott, Chief Executive of Peabody, said: 'With one in 50 Londoners and one child in every classroom effectively homeless and in temporary accommodation, the growing housing emergency needs to be addressed now.

'With its spring budget just around the corner, the government has the power to put forward a plan that addresses growing homelessness while simultaneously providing a much-needed boost to the economy.

'Building such a huge number of social homes will be a challenge but it’s one we and our partners can rise to - but only if increased public investment is available.

'Without the investment and delivery of not-for-profit housing associations in the past decade, the problem would be even worse. But despite our best efforts, the housing emergency has intensified. Rising costs, high interest rates, chronic public underinvestment and an urgent need to spend money on our existing homes has taken funding away from building new social homes.

'More money from the government would help fund more social rented homes and be transformative in a number of ways, addressing a range of social and economic issues. It would also ultimately be cheaper for the taxpayer, saving councils vast sums on temporary accommodation, and reducing the amount of housing benefit that goes directly to private landlords.

'We could begin to tackle the housing crisis, taking people out of poverty, boosting health and stimulating supply chains, while driving sustainable growth. The whole country would benefit from tens of thousands of new jobs and billions more pumped into the economy.

'An affordable home that is safe and comfortable is the foundation of good health and wellbeing, and I think the single best way of alleviating poverty and improving social mobility. This report, along with a housing crisis that’s getting worse by the day, should be yet another stark wake up call for the government to take decisive action.'

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