An independent report published today by the g15 group of housing associations concludes that the case for government investment in affordable housing in London is overwhelming.
The report, which was produced by the London School of Economics and Political Science, was commissioned by the g15 to clarify the case for investment in affordable housing in London and the reasons why government funding remains core to success.
The report focuses on three main criteria for allocating subsidy: housing need; the wider benefits of affordable housing to the health of the economy and the public purse; and the issue of housing numbers.
On all three criteria, LSE researchers found, the case for investment in London is particularly compelling.
The report also concludes that:
- There is a strong case for including need as a core criterion for allocating capital grant for housing investment.
- Without London’s contribution, neither the national pledge of 150,000 affordable homes during this Parliament nor longer term housing objectives is achievable.
- Affordable housing investment in London will be used more intensively than elsewhere and will have greater impact on reducing the need for public money by alleviating social costs.
- Investment in affordable housing in London helps to support the broader economy, creating spillover benefits for the rest of the country.
- The successful delivery of affordable housing needs subsidy and London has a relatively greater need for subsidised housing than the rest of the country.
Stephen Howlett, chief executive of Peabody and outgoing chair of g15, said:
“The report clearly sets out the pressing need for affordable housing in London and the far-reaching social and economic benefits of investment.”
Boris Johnson, the Mayor of London, said:
"Not only does London have the greatest need for more affordable housing but there is also indisputable evidence that the wider UK economy benefits most when investment goes into the capital's housing stock. In addition, focussing on London has a greater impact on reducing welfare costs. Put together, these arguments make the most compelling case for the government to concentrate its housing programme where it will deliver the greatest returns for all."
Christine Whitehead, Professor of Housing Economics at LSE, said:
“London not only has the greatest need for affordable housing but also the greatest capacity to build especially in the current uncertain environment.”
Baroness Jo Valentine, Chief Executive of London First, said:
"London has a significant shortage of housing – particularly affordable housing. For the capital to maintain its position as a strong source of economic growth it needs key people on low and medium incomes not to be pressed out of the market."
Read the executive summary of the report
Read the full report
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