New research shows a one per cent increase in housing affordability in London could yield a boost of £7.3 billion in economic output over a decade.
The analysis, which was jointly commissioned by London Councils, the Mayor of London, Trust for London, and the G15, uses a new economic model to outline the significant impact housing affordability has on London’s productivity and growth.
London is grappling with the most severe housing and homelessness pressures in the country. London Councils estimates at least one in 50 Londoners is currently homeless and living in temporary accommodation.
More affordable housing would help reduce homelessness in the capital, as well as make it easier for London employers to attract and retain workers, and enable households and businesses to invest in more productive economic activity. This in turn can lead to more jobs and investment for future growth.
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.