NHF and Shelter: deliver required social homes and add £50bn+ to economy

The new homes figure is taken from previous research (on behalf of the NHF and Crisis in 2019) which identified that this number of new social homes would need to be delivered every year for a 10-year period to tackle the housing crisis and end homelessness.  

However, the CEBR analysis models the impact of building the 90,000 homes just once (in one year) to track the effect these would have over time.

The report’s authors found that building these homes would directly support more than 139,000 jobs in the first year. Meanwhile, the costs of doing so would ‘break even’ by year three, when looking at the cumulative net present value (NPV) across direct and indirect benefits, to deliver a year-three NPV of £2.4bn.

By year four, this figure would stand at nearly £5bn, and by year 30, the estimated aggregate net benefit would be £51.2bn.

In the report assumptions, the total upfront costs of building the homes are placed at £35.4bn, of which a third, £11.8bn, would be grant funding and £23.5bn would be from additional sources. Calculating the total benefits of the homes to be £86.5bn (gross) over 30 years, this delivers a cumulative NPV of £51.2bn.

Meanwhile, from the exchequer’s perspective, the project would reach a ‘break-even point’ 11 years after construction, and from then on produce NPV for the government. Over 30 years, the NPV to the exchequer of initially funding the homes would be £11.9bn (based on gross benefits of £23.7bn, minus the £11.8bn of grant funding).

The findings come after research by Shelter published in December found that nearly half (49 per cent) of teachers at state schools in England work at a school with children or are homeless or have become homeless within the past year. According to Shelter’s analysis of government data and data provided by councils, almost 140,000 children in England are now living in temporary accommodation – representing one in every 84 children. 

Commenting on the latest report, Polly Neate, chief executive of Shelter, said: “Homelessness is a political choice, with a simple solution. Building 90,000 social homes a year will not only end the housing emergency, but due to the wider economic benefits it brings, it will pay for itself within just three years.

“Day after day our frontline services are inundated with calls from people who are being tipped into homelessness because there are no genuinely affordable homes available and private renting is just too expensive. Communities are being torn apart as people are priced out of their local areas – leaving behind their jobs, children’s schools and support networks.

“It doesn’t have to be this way. A safe and secure social home will give people a place to thrive – improving their health and access to work and education. All political parties must make the choice to ending the housing emergency – they must fully commit to building 90,000 new genuinely affordable social rent homes a year for 10 years.”

Kate Henderson, chief executive of the NHF, said:“This research shows not only that the housing crisis can be solved, but that this can be done in a way that will save the taxpayer money, boost jobs and bring huge benefits to the wider economy.

Right now, we are in the midst of a housing emergency. Millions of children are being pushed into homelessness, families are being forced into impossible choices to keep a roof over their heads and people in every community in the country are seeing life chances harmed by inadequate housing.

“Building more social homes is a win-win solution. It will immediately boost the construction industry, supporting thousands of jobs, and will save the government and taxpayer money over the longer term. It also brings huge benefits to people affected by the housing crisis through reducing homelessness, increasing employment and boosting children’s life chances. We urge all political parties to commit to a long-term plan for housing with funding to build a plan for a generation of new social homes.”