02/07/13

High house prices choke economic recovery

Employers across England have voiced concerns about the impact of sky-rocketing rents and house prices choking economic recovery.

A survey, conducted by Comres on behalf of the National Housing Federation interviewed over 1,000 line managers across the country, and found a lack of affordable housing is impacting on businesses. It revealed that managers are finding it tough to attract workers and expand because house prices and rents are beyond the reach of many people.

Nearly eight out of ten employers said soaring house prices are a problem in their local area, and over 70% agreed that building more homes would stimulate the local economy and bring in more business and customers.

The survey results come with a stark warning; that if we don’t build more housing people can afford, employers will simply move away – potentially out of the country – taking with them desperately needed local jobs.

However, less than half of the homes the country needs each year are currently being built, reducing employment mobility and pushing up house prices and rents.

Combined with the housing shortage the average price of a home in England for a first-time buyer in 2012 was £173,185. Forecasts warn that this will increase 42% by 2020, reaching £245,165. Rents are also set to rise by around 6% a year, mirroring increases in interest rates and house prices. In 2018, private rents will be 32% more than they are today.

However housing associations are tackling the housing crisis by building around 40,000 new affordable homes a year throughout England, annually adding about £4.4 billion to the UK economy and supporting around 94,000 jobs. As major employers with sizable development programmes, housing associations bring significant GVA to local economies and create jobs. Every affordable home built creates 2.4 jobs for the UK economy.

The challenges that local businesses are facing are of huge concern, when employees are unable to find affordable homes. We think housing associations are ideally placed to help LEPs support business growth as they provide a range of housing options, including low cost home ownership, market rented housing and homes for outright sale. To enable businesses to grow and take on local staff, investment in affordable housing needs to be put at the top of local agendas.

In response to the housing crisis we launched ‘Yes to Homes’, a campaign that shows local people and businesses that want more affordable housing how they can get their voices heard. See www.yestohomes.co.uk.

Our survey showed that four out of five employers throughout England who are aware of LEPs think affordable housing should be part of local strategies for growth and jobs.

We are keen to work with LEPs to help address the issues raised by local employers and drive local economic growth by together saying yes to more homes for people in the right places at the right prices and taking a lead in housing growth.

To find out more about the important local economic contribution housing associations make and opportunities for how you could work with your local housing association please contact Catherine Brabner at the National Housing Federation on 0117 952 9914 or [email protected]. There is also more information on our website: http://www.housing.org.uk/policy/localism/local-enterprise-partnerships

If you would like to find out more about Yes to Homes or to sign up visit www.yestohomes.co.uk

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