A new outlook requires new solutions

Council house-building renaissance would save post-Brexit Britain billions

Building 100,000 social rent homes a year would save the country billions whatever happens to the economy post-Brexit according to new research published today by a group of housing organisations.

Research by City consultancy Capital Economics for a coalition of housing organisations has assessed the impact of future investment in council house-building on the UK economy in the light of Brexit.

Analysing potential future direction for borrowing costs and economic growth,the new analysis Building New Social Rent HomesAn Updated Economic Appraisal presents four scenarios for the economy post-Brexit (“Britain becomes Japan”; “Back to the 1970s”, “Strong Economic Growth” and “Capacity Constraints”). The research finds that in each of the scenarios funding new social housing would deliver long term savings to the Government of up to £300 billion.


Among its findings:

  • Investing in genuinely affordable new homes for rent will reduce the massive bill the taxpayer picks up paying the rents of low-income people in the private sector. Over a 50 year period the saving would be between £100 billion and £300 billion;

  • The upfront cost to the Exchequer of building 100,000 new homes a year would cost no more than two weeks’ worth of current spending on the NHS;

  • Borrowing for investment in valuable physical assets is good for the economy and would be welcomed by the financial sector.

 

The NFA and ARCH,whose members manage more than one million council homes in England and Wales, and SHOUT’s campaigners are calling on the new government to invest in 100,000 new homes per year at genuinely affordable rents in the new economic environment following Brexit, and at a time when the Local Government Association has warned that 4 million working people will no longer be able to find somewhere affordable to live by 2024.


Hugh Broadbent, Chair NFA points out that:

“To complete a 100,000 new homes per annum housebuilding programme would only cost £7bn - the equivalent of two weeks’ worth of spending in the NHS. But, in the long-run the return on this borrowing would deliver greater savings to the taxpayer and the economy. Critically the investment needed would be paid for through rental income and not from general taxation”.


The experts at Capital Economics add:

“Not all borrowing is the same. It would be quite right to be concerned about an increase in public debt in order to fund the day-to-day costs of public services. Borrowing to invest or save, as for this policy, is prudent however and would likely be welcomed rather than met with alarm.”


Martin Wheatley, a leading member of the SHOUT housing campaign said:

“This research shows that public investment in lower rent rental housing can and should be central to Theresa May’s ambition to help those families who are “just getting by.”  As well as providing a secure home at a rent households can afford, such investment would save the taxpayer billions in the long term. Support for a council house-building renaissance, alongside development by other social landlords and the private sector is critical if the Government is to achieve its ambitions for 200,000 or more new homes per year.”


Councillor Paul Ellis, Chair ARCH said:

“For some time large parts of the country have experienced a housing crisis, and it is increasingly obvious that positive action needs to be taken sooner rather than later. Innovative ideas from several Councils and their partner ALMOs have already shown we are more than capable of being part of the solution, and we want to do more. In addition to increasing Britain’s housing stock by more than four million homes over 50 years, a Council led house-building programme would go a long way to help families who are being priced out of the market. 2024 will be here before we know it – Councils and ALMOs are up for the challenge, and are ready to play our part.”

Notes for Editors:

Today’s report:Building New Social Rent Homes anUpdated Economic Appraisalis an update of update of research published in 2015 by the NFA and SHOUT. The original research can also be found here:

LGA’s research on housing affordability can be found at http://www.local.gov.uk/web/guest/media-releases/-/journal_content/56/10180/7910317/NEWS

SHOUT

Shout is a volunteer-run campaign making the case for investment in genuinely affordable homes and demonstrating the positive effects that such housing has on people and communities.   It was launched in June 2014, with support from politicians of all parties, and housing tenants and professionals.

SHOUT contact
Email: martinwheatley10@virginmedia.com

Tel: 07722997246

www.4socialhousing.co.uk

NFA -The National Federation of ALMOs

There are 37 ALMOs (arm’s length management organisations) across England managing 503,311 council homes across 40 local authorities.

NFA Contact:
Email: Joanne.Kent-Smith@almos.org.uk

Communications and Relationship Manager

Tel: 02476851729 or 07944458294

@NFA_ALMOs

www.almos.org.uk


ARCH - Association of Retained Council Housing

Working on behalf of local authorities who own and manage council housing.

ARCH contact:
Email: john.bibby@arch-housing.org.uk

CEO ARCH

Tel: 07511 820750

@ARCH_housing

www.arch-housing.org.uk


Capital Economics

Capital Economics is one of the leading independent economic research companies in the world. They provide country and regional research on the US, Canada, UK, Western Europe, Japan, China, India, Latin America, Emerging Europe, the Middle East, Africa, Emerging Asia and Australia and New Zealand. They also provide overview services covering the global economy and financial markets, and have dedicated services providing research on commodities and on the property sector.

Founded in 1999, Capital Economics has gained an enviable reputation for original and insightful analysis and have built up a diverse and distinguished client base. Overall, more than 1,500 institutions around the world subscribe to Capital Economics publications.

Capital Economics contact: for technical analysis queries
Email: Justin.chaloner@capitaleconomics.com

Tel: 020 3750 0992


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  • I live in rural Gloucestershire where our local council landlord has decided to " redevelop" approximately 4 sites of approximately 50 social housing sheltered properties per site to make way for " Affordable Housing" Only problem is; What is affordable in the Cotswolds is not affordable for ALL of the elderly, disabled and vulnerable residents who are being told to MOVE. Despite the media Hype the properties due for demotion are clean dry and VERY usable. Especially if you are sleeping rough in the freezing cold!!!
    UPDATED October 2016 Capital Economics report: Building Social Rent homes
    SHOUT Supports ending the Housing Crisis in a Generation