A report commissioned by Get Living London says that the lack of decent housing could reduce the city’s economic output by £1bn a year, rising to a cumulative loss of £85bn by 2025.
The issue is that potential economic growth will be cut off by a lack of housing for new workers to live in — or rather, housing that workers can afford to live in. London is growing faster than the rest of the country and is forecast to increase employment opportunities further as the economy recovers. The report specifically looks at the private rental sector, as more 20-40 year olds are likely to rent privately than any other mode of housing, and are the younger, more flexible types of workers these new jobs are likely to attract.
Such is the potential for strangling London’s growth that the report ranks lack of affordable housing as more pressing than Heathrow or HS2; those infrastructure projects that have politicians battling in a way that housing never seems to. New building is cited as the primary cure, but identifies blockages in planning restrictions (greenbelt, conservation areas) and also suggests that building social and affordable housing pushes up the cost of private builds, by removing available land for other development.
Some among you may have already realised that Get Living London is the private rental company that owns East Village, formerly the London 2012 Athletes’ Village. So this report, which says we need more new build property to rent, is coming from a new build property development company. But it was written by Professor Michael Ball of Reading University, who specialises in housing supply and urban economics, and its general argument is in line with a recent London First report saying businesses are worried about recruiting staff because of housing costs. And we all know what’s happening to private sector rents.
We’ll leave you with this comment that particularly leapt out of the page at us:
“For many, rising house prices and rents are a sign of virility and the strength of the London economy. Unfortunately, instead, they are a sign of a malaise that will gradually price people and businesses out.”
Photo by M@