It’s the Economy…
We all know that housebuilding drives economic growth. Building just 100 new homes is estimated by the HBF’s housebuilding calculator (https://www.hbf.co.uk/research-insight/hbf-housing-calculator/)to:
- Support the employment of 347 people
- Provide 4 apprentices, graduates or trainees
- Increase open space, community sport and leisure spending by £90K
- Generate £4.5m towards new affordable housing
- Generate £625k towards infrastructure, including £282K towards new and improved schools
- Generate £2.7m in tax revenue including £201K in council tax revenue
But here’s something we don’t think the government have got their heads round yet – the demand side of the equation:
- Rising unemployment means we build fewer homes.
- High interest rates mean we build fewer homes.
- High inflation means we build fewer homes.
This chart is all publicly available data, from the ONS.
And yes, there are plenty of other barriers to housebuilding, but with over a million as-yet-unbuilt homes already granted planning permission, it’s only sensible to look at the basics of market economics to solve the issues.
If people feel safe in their jobs, mortgages are affordable and the cost of living were not rising so relentlessly (forget the headline inflation figures – food inflation is running at 4.9%!) – maybe people would feel financially safe enough to buy new homes.
Discuss!
James Scott
MD
