A failure to meet the UK’s national housing needs is hampering British business growth to the tune of £13.3 billion every year, claims Arcadis.
By calculating the direct financial impact of housebuilding on lowering wage premiums, labour market allocation and money spent in the immediate area, Arcadis has shown that the potential growth opportunity for British businesses could be significantly more than previously realised.
According to Arcadis’ latest report, Building Homes - Making Places, each and every new home built has the potential to contribute £53,000 to the nation’s business community. With government estimates indicating that the UK needs to build at least 250,000 homes every year to meet projected demand, the wider financial gains generated by meeting this target could also give a significant and much needed boost to the nation’s business community.
Delivering more housing can help to lower the premium bosses need to pay for efficient labour market allocation. This means that up to £21,000 can be freed up to re-invest back into the business, allowing the opportunity to significantly improve competitiveness. Of this sum, £3,000 alone comes from funds that would previously have been diverted towards housing subsidies for those living in areas where the cost of living comes at a premium.
Finally, bringing more residents into the area means that a further £32,000 per home is generated annually in terms of local spend being recycled through the economy.
The latest quarterly survey from the British Chambers of Commerce shows that UK business growth has remained static this year. While the ongoing lack of clarity around Brexit transitional arrangements has undoubtedly had a dampening effect, these figures show that any moves to unlock the housing market could have knock-on benefits in terms of supporting the resiliency of British business.
In order to develop more housing however, there needs to be a radical shift in the way the nation builds, rents and buys its homes. The ability to procure land and unlock sites in key towns and cities is pivotal, and government-sponsored construction has a major part to play.
Peter Hogg, Arcadis regeneration spokesperson, explained: “The UK’s failure to keep pace with housing demand isn’t just damaging our social and economic competitiveness; it’s having a severely detrimental impact on potential business growth. Addressing these issues is more important now than ever. As we head towards Brexit, the pressure is on our city regions to attract business and investment, and building good quality housing is one lever that will play a major part in that.
“Devolved administrations up and down the country must take the lead in starting to build. Public sector construction is something we haven’t seen on any sort of scale in decades. But, if it were to take place at the same time as sponsored investment in offsite, high-tech construction methods, it could make a genuine difference to our housing numbers.
“The benefits of building more homes are much greater than previously thought, so it makes perfect sense to put every ounce of effort in to get this right. Clearly, this is an extremely complex conundrum to solve but if we start making some real progress, the next ten-to-fifteen years could see a housing boom the likes of which have not been seen in over a century.”
