Previous research commissioned by Shelter and the National Housing Federation has estimated the net economic benefit of building 90,000 social homes in a single year to be £51.2bn over 30 years.7 Expanding on those findings, this analysis examines the cumulative economic impact of building a new generation of social homes at the quantity required to deliver on the government’s overall target. [...] Crucially, while most of the initial economic benefit flows from construction, which occurs irrespective of the tenure of the home once built, a significant portion of the long- term economic benefit flows specifically from the home being for social rent. [...] To properly address the backlog of social housing need, similar numbers of new social homes will be required for at least a decade thereafter.31 Our calculations are predicated on the private sector delivering around 240,000 homes by the final year of this parliament, a volume unprecedented in the postwar period (figure 1) that would significantly exceed the number of homes analysts anticipate the. [...] The government is forecast to spend £67bn subsidising the PRS over the next five years.48 Our research suggests that building this volume of social homes over the remainder of this parliament and generating this tenure shift from the PRS to the social sector will significantly reduce the amount of public money spent on housing benefits, generating £19.7bn savings over 30 years. [...] We also reduce the risk value by half, acknowledging that while a new generation of social homes is not entirely without risk, the overwhelming demand for social housing means most of the economic benefit of investment in social housing is likely to be realised.
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- Pages
- 21
- Published in
- United Kingdom
Table of Contents
- Introduction 1
- Green Book 2
- Building more social housing to deliver 1.5m homes 3
- Measuring the economic impact 9
- Accounting for the long-term benefits of building social housing 9
- Green Book 9
- Economic impact from construction and management 11
- Direct benefit to the public finances 11
- Reduced housing benefit expenditure 11
- Increased tax revenue from construction 11
- Indirect benefits to the public finances and wider society 11
- Labour market tax and social security 12
- Homelessness 12
- Education crime and health 13
- Summary 14
- Conclusion 16
- Appendix Adjusting the social discount rate 18
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- Time preference 18
- 𝜌 𝜌 𝐿 𝛿 0.5 18
- Wealth effect 18
- 𝜇 𝜇 1 𝜇𝑔 19
- Summary 19
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