One of the most striking things about the housing debate over the last year is how there seems to be more and more agreement over what needs to be done – at least outside Parliament. This stretches beyond just the need to build more homes, to specific solutions. Across the sector, there is an emerging consensus on the need for bolder action, including tough reform, smart investment and strategic local leadership.
Below, our guest blogger Joe Harley from the CBI gives us their take on our recent report with KPMG, and the urgent need to build more homes.
Joe Harley is a Senior Policy Adviser at the CBI (Confederation of British Industry)
With under a year to go until Britain heads to the polls, the recent ‘Building the homes we need’ report from Shelter and KPMG is a sober reminder of the challenges we face in what will be a hotly contested political battleground. As the report highlights, the root of this challenge lies in the need to significantly ramp up housing supply, roughly doubling the number of new homes we build a year. Without concerted action we will continue to see people priced out of buying their first home, thwarted in climbing up the housing ladder and the further denting of our economic competitiveness.
Bearing in mind the debate surrounding the economy and the cost of living, housing shortages and rising house and rental prices are seen as a key issue for the voting public. As recent polling by Shelter, KPMG and Populus shows, 69% of respondents said any recovery “won’t feel real” until it genuinely gets easier for young people to own a home. It also reveals that parents’ concerns over their childrens’ prospects of owning their own home competes alongside improving job prospects and rising wages as an indicator of a family’s recovering prosperity.
The impact of our inability to deliver the number of new homes we need to meet demand, and the bearing this has on affordability, is certainly not lost on CBI members. As the latest CBI KPMG London Business Survey illustrates, housing costs again come out as the second biggest threat to competitiveness in the capital, with a quarter of those CBI members based in London surveyed listing it as a risk to London’s ongoing competitiveness when compared to other global cities.
The core of the issue is that skilled workers looking to base themselves in the capital are being deterred by a lack of new homes to buy, and high rent prices, that are pushing up housing costs in and around London. 61% of respondents to the survey said rising house prices and lack of availability have a negative impact on recruitment of entry level staff, with half of respondents saying the same for mid-level managerial employees and nearly a quarter (23%) for senior staff.
As ‘Building the homes we need’ also makes clear, there is a robust case for boosting housing supply to support the expansion of economic growth and jobs. With confidence and vigour in the UK economy growing, increased house building would provide a significant boost to the construction sector. Construction generates an economic return of £2.84 for every pound spent, and for every home built 1.5 jobs are created directly, with up to four times that number being supported in the wider supply chain.
With political parties reflecting on the content of their manifestos, it is critical we deliver them a robust message with bold ideas to tackle the housing challenge. Bold ideas to help increase the availability of land for new homes, to win over local communities to support new housing developments, to deliver a fair land and property tax system and to find innovative ways to finance the construction of a new generation of homes to buy and rent.