Housing associations reveal the £7billion cost of the capital’s housing crisis

London’s largest group of housing associations has conducted the first ever research focusing on the social and economic value of social housing which shows the economy is losing at least £7billion a year in potential rent payments.

The study, by G15, shows there are 655,000 social rent homes in London, 44 per cent of which are provided by housing associations.

Housing associations are not-for-profit organisations which support people in need of housing  with homes at below-market rent. All the money they make is reinvested into building more affordable homes and delivering services for residents.

Tower Hamlets, Lambeth and Lewisham top the table when it comes to the value generated by social homes provided by housing associations.

Tower Hamlets currently has 25,230 social rent homes generating £599.9million each year.

Lambeth comes second with 18,370 social homes bringing in an annual £436.8million and Lewisham third with 18,215 homes at a yearly value of £433.1million.

Three other South London borough’s make the top 10 with Southwark in sixth place followed by Greenwich and Bexley in ninth and tenth, generating a combined total of £757.4million a year.

Fiona Fletcher-Smith, chairwoman of the G15 said: “We’re a nation obsessed by house prices but few people and even fewer politicians appreciate the real value created by London’s social homes.” 

Across London, housing associations currently provide 289,000 social rent homes totalling more than £6.86billion every year. 

This means, providing new social tenancies for the 323,800 households on London’s social housing waiting list would inject an additional £7.7billion a year into the economy, according to G15.

But building is grinding to a halt, with research showing that housing associations are expected to start work on 1,769 affordable homes in London this year, down from 7,363 last year.

The organisation said a “relentless churn” of Housing Ministers, making short-term decisions on how rental income is calculated, has made it increasingly difficult for associations to secure long-term investment for building while also undertaking refurbishment on existing homes to ensure safety and achieve net zero targets by 2050.

According to G15, the Conservative Government’s imposed 7 per cent rent cap – coupled with inflation and interest rates – is “the final nail in the coffin”, forcing housing associations to cut back on building.

The services provided by housing associations range from domestic violence refuges, homeless hostels and training and apprenticeships programmes. 

According to the study, the impact of rent savings from housing associations social rent homes contribute £2.34billion to the economy each year from higher employment opportunities and productivity, £649.3million from police and crime reduction and save local authorities an annual £555million in spending on temporary accommodation, social care and child protection.

But G15 said, on top of building restrictions, their services are coming under pressure due to “drastic cuts” in social care at Government and local levels across the country.

Ms Fletcher Smith said: “Political parties would do well to remember that London is built on a vibrant mix of people from all walks of life. Providing homes for those that need them most is an asset, not a cost, creating all kinds of social and economic benefits.”

The Department of Levelling Up Housing and Communities has been approached for comment.

(Picture: Pixabay/H031175 )