Londoners living in social housing contributed at least £15bn to the capital’s economy in 2015
But new report finds that lack of affordable housing is the city's Achilles heel.
We've today published a report which reveals that Londoners living in social housing contributed at least £15bn to the capital’s economy in 2015 alone.
Findings from 'The Business Case for Affordable Housing', show that the capital's social housing residents make a contribution that is five times greater than the housing benefit bill for social housing residents in London in the same year. But with rents outstripping wages in every London borough and a severe shortage of new affordable homes being built, vital workers are being forced out of the city. This creates a real risk of damaging London's economy.
The report, which we have produced in partnership with the Confederation of British Industry (CBI), also reveals that:
- An analysis of social housing residents' occupations in the capital shows that over a third work in the emergency services (ambulance, police, fire service) while over 30% work in lower paid jobs which are essential to the effective running of the capital - these include carers, security staff, cleaners, postal workers, kitchen assistants, and bar staff and waiters/waitresses.
- Young professionals are also struggling to afford to live in London. The report finds that a salary of £59,000 – almost double the average wage – is needed to afford the rent on a home in Inner London.
- Businesses of all sizes and sectors have made it clear that both housing cost and availability is negatively impacting on their ability to recruit and retain staff.
The report suggests that the narrow definition of key workers fails to appreciate the essential role to the economy of many people working on lower incomes. Post Brexit, ensuring London remains globally competitive is even more important. And that means making sure the people who keep our city running have an affordable home.
Research for the report was carried out by the independent Centre for Economics and Business Research (CEBR).
Lord Kerslake, Chair of Peabody said:
"London is gambling with its future if the city becomes too expensive to house nurses, paramedics, construction workers or many other lower- and middle-income occupations. Without genuinely affordable housing our great city will cease to function. Businesses will be worse off and the economy will slow down.
"Far from being a drain on resources, social housing residents in London contribute £15bn a year to the economy. They keep our city running. We all depend on them.
"For our capital to continue being a successful city we need to radically ramp up housing supply across all tenures, but with a particular determination to deliver many more genuinely affordable homes for rent."
James Murray, Deputy Mayor for Housing and Residential Development, said:
"As this report demonstrates, there is clear and broad agreement in London that building more affordable housing is essential to the capital’s social and economic success. We need to build more affordable homes of all sorts, including social housing to support hundreds of thousands of working Londoners, without whom our vital services would grind to a halt.
"As someone who grew up in a council home, Sadiq is determined to ensure that Londoners today have the same opportunities he benefitted from. We need government at all levels to work with housing associations, developers, investors, and businesses to build genuinely affordable homes to rent or buy, or London’s economy will pay the price."
Lucy Haynes, CBI London Director, said:
"Whether it’s the strength of the capital's professional services sector or our ability to adapt to an ever-changing digital landscape, it’s clear that London is an international trailblazer.
"Yet, the capital does have an Achilles heel – affordable housing. Many of those who, quite literally, keep London running day in and day out are finding it too expensive to live in the city in which they earn their livelihood. For our emergency servicemen and women, young professionals, and low earners, from security staff and cleaners, to postal workers and waiters, we cannot simply carry on as before.
"Now more than ever, in light of the decision to leave the EU, we desperately need a housing strategy to build 50,000 homes a year to enable the city to continue to be a magnet for its exceptionally talented workforce. Without it, the capital and its economy will lose out to our international competitors, who are already snapping at our heels."