Member Article

"Missing" 100,000 homes hindering economy

New houses will be essential for economic growth and recovery, according to the latest Centre for Cities report released on Monday.

The Local Government Association-sponsored publication highlights the top 10 cities where funds are desperately needed to accelerate the rate of house building, to support new jobs and keep up with the growing population.

Britain needs to build a minimum of 230,000 new homes every year as a basic requirement, however this target is not currently being met.

In the last 30 years, this objective has only been reached once, whereas between 1951 and 1981, levels of building in the public sector only dropped below this point once.

Centre for Cities’ report also showed Britain is currently falling short of this target by 100,000 homes each year, meaning the country is not fulfilling its growth potential as a result of poor housing policy.

London was the worst affected by an income gap between earnings and affordable mortgages, with a £55,806 gap between the two, followed by Oxford, Cambridge and Brighton.

The report highlighted some “surprising” results, that showed Sunderland has the narrowest gap between average income and the average mortgage, while Burnley has been “left relatively unaffected by the recession.”

Recommendations said an overarching policy to build new homes in all cities would not be an effective solution, because some would benefit more from “retrofitting and refurbishment” of existing houses.

10 cities were highlighted as having the most rapid growth potential, including Oxford, London and Cambridge as the top three.

These cities, all in the South of England, will benefit most from investment in housing in the short term, and Centre for Cities report urged the Government to pump money into these areas.

Burnley, Bradford and Hull were the top three cities that would benefit from a mixture of refurbishment and new homes, and all cities were in the North of England.

If the UK is able to meet its target of 230,000 new homes a year, the housing industry could provide work for 150,000 people including 90,000 low skilled jobs and a 1% boost to the economy.

Greg Clarke, MP, Financial Secretary to the Treasury and Minister for Cities, commented: “2013 will be an important year for cities.

“Britain’s cities have the potential to drive economic recovery as the places in which most British jobs and businesses are located.

“Following last year’s ground breaking agreement of deals with eight cities, 2013 sees the opportunity extended to another 20 cities –a transformation in the relationship between central Government and our great urban centres.”

Mr Clarke pointed to Lord Heseltine’s economic report published in October, and said these recommendations will “reinforce the progress” the UK needs.

Nick Clegg, MP, Deputy Prime Minister, said: “Now it’s time to free even more places from Whitehall control.

“I want more cities to come up with ambitious and innovative proposals to help them make changes that will be felt by everyone across their region.

“It is an exciting time for cities and as such I welcome this important contribution from Centre for Cities.”

Adding to their comments, Alexandra Jones, chief executive of Centre for Cities, said: “Cities must have the freedoms and flexibilities to make decisions about housing policy based on local circumstances.

“For some cities, lack of housing prevents people accessing jobs or means they are stuck in cramped accommodation.

“In other cities, incentives to retrofit empty houses could improve local quality of life. Both approaches, adapted to local needs, would generate the jobs and growth the UK needs.

“Policy that can adapt to local needs and greater devolution of powers and funding to cities could be the recipe that the UK economy needs to get back to sustained economic growth.”

This was posted in Bdaily's Members' News section by Miranda Dobson .