‘It’s a win-win solution’: Building social housing could add £50bn to UK economy, study finds

The next government should invest in building 90,000 social homes a year to give the economy a £50bn boost, according to Shelter and the National Housing Federation (NHF).

Fixing the housing crisis could help ministers build their way out of recession in the short-term and boost the long-term health of the nation by reducing bills for homelessness, benefits and the NHS.

The analysis from the Centre for Economics and Business Research also laid out how building 90,000 social homes could directly support 140,000 jobs in the first year alone, see the government break even inside three years and offer taxpayers a £12bn profit over 30 years.

Polly Neate, chief executive of Shelter, said: “Homelessness is a political choice, with a simple solution. Building 90,000 social homes a year will not only end the housing emergency, but due to the wider economic benefits it brings, it will pay for itself within just three years. 

“A safe and secure social home will give people a place to thrive – improving their health and access to work and education. All political parties must make the choice to end the housing emergency – they must fully commit to building 90,000 new genuinely affordable social rent homes a year for ten years.” 

The economic analysis found the government would initially be required to spend £11.8bn to fund building 90,000 social rent homes every year for the next decade.

But that would be paid back in 11 years with a £12bn net profit for the taxpayer over three decades.

Meanwhile the total economic and social benefits over that time period amount to £51.2bn.

Those savings come from social homes offering a more secure and stable living situation than private renting with greater tenant rights and protection from eviction.

That could see a £4.5bn saving on housing benefit, £2.5bn slashed from costs to the NHS and £4.5bn saved due to a reduction in homelessness.

A total of £3.3bn would no longer have to be paid out in universal credit while the public coffers would be boosted to the tune of £2.5bn and £3.8bn for construction and employment taxes respectively.

With the general election looming, Shelter and the NHF want all political parties to commit to ending the housing crisis with a long-term plan to prioritise social housing.

Kate Henderson, NHF chief executive, said: “Building more social homes is a win-win solution. It will immediately boost the construction industry, supporting thousands of jobs, and will save the government and taxpayer money over the longer term.

“It also brings huge benefits to people affected by the housing crisis through reducing homelessness, increasing employment and boosting children’s life chances. We urge all political parties commit to a long-term plan for housing with funding to build and plan for a generation of new social homes.” 

The latest YouGov polls put the Tories 26 points behind Labour with a general election slated for later this year.

Matthew Pennycook, Labour’s shadow housing minister, promised the party will “get Britain building” the day after the Competition and Markets Authority opened an investigation into eight house builders over sharing information which could be influencing house prices.

“The Tories have created a housing emergency with more than one million people waiting for a social home,” said Pennycook.

“The next Labour government will get Britain building and deliver the biggest boost to affordable, social and council housing for a generation. Developers have been let off the hook and for too long allowed to wriggle out of their responsibilities to provide new social and affordable homes. Labour will robustly hold them to account to deliver on their obligations to deliver affordable places to live.”

A spokesperson for the Department for Levelling Up, Housing and Communities insisted: “Our commitment to building more homes and boosting social housing supply remains, and our £11.5bn Affordable Homes Programme will deliver thousands more affordable homes to rent and buy across the country.”

Do you have a story to tell or opinions to share about this? We want to hear from you. Get in touch and tell us more.