A new report from the Home Builders Federation measures the economic footprint of home building beyond the bricks and mortar
Debates around housebuilding are often characterised by a trading off of numbers but we rarely have the opportunity to step back and consider the wider benefits that development brings to a community and to the wider economy.
The recently published Economic Footprint of Home Building report by the Home Builders Federation quantified the various contributions that the home building industry makes each year, finding that the 240,000 homes built last year generated over £53bn in economic activity and supported more than 800,000 jobs.
With growth placed at the centre of the new government’s plans and announcements during its first few months in office, it has been a relief to the industry that the role of
home building in these plans has been sufficiently acknowledged.
Hitting the government’s 1.5m homes target over the next five years would generate a total of £330bn in economic activity and £40bn in tax receipts for the Exchequer, as well as supporting over a million jobs each year.
However, while the economic contributions and employment that the industry supports are headline grabbing, particularly in the context of the government’s “Growth Mission”, the various contributions to local communities that the report highlights are also central to
supporting increases in housing supply.
Opposition to development
The biggest block to new homes being delivered over the last few years has been NIMBYism, both from local councils and the previous government – which manifested itself primarily as the removal of mandatory housing targets in the planning framework changes first proposed in December 2022.
While there has been a change of direction from the new government and these changes have been reversed, the opposition to development still exists in many local authorities. The government has maintained that local democracy will still be important under the new planning system, and so the risks that NIMBYism pose to new housing could still have an impact.
Often, this opposition is justified by the groups or councillors not as opposition to the homes themselves, but that the local community cannot cope with the increase in
population. However, as the report demonstrates, the building of new homes contributes millions of pounds to these facilities.
On average, each local authority in England saw an increase of 740 homes last year. This equates to over £2m in funding for new and improved schools, £1.5m in additional council tax to fund local services and almost £700,000 in additional funding for local open spaces going to each council.
If the government’s housing targets are achieved, the next five years will see each council receive an average of £13m for schools, almost £10m in council tax and more than £4m
for community open spaces.
Additionally, further recent research from HBF has found that some councils are not even spending the contributions that developers are making, with over £8bn in infrastructure
receipts from developers across England and Wales remaining unspent, including £2bn allocated for education and £873m for social infrastructure.
Making the case
Already, some local authorities are resisting the government’s proposed changes to the NPPF, with multiple councils, representing a range of parties, stating that reintroduced local housing targets are unrealistic and unfair. This gives licence to the resident groups that oppose planning applications, who echo the same concerns.
The change of approach from Westminster towards planning reform is welcome, but if the government’s housing ambitions are to be met, then the argument still needs to be won at a local level. NIMBYism will always exist to some extent, but some opposition could be won over if the economic and social benefits that new homes bring were being fully realised by local communities.
HBF is calling for the government to implement greater responsibilities on local councils to ensure it is clear when and why infrastructure funded by developer contributions is being delivered and why it is delayed.
Councils also need to be placed on a more sustainable footing to guarantee they have sufficient staff and other resources necessary for oversight and monitoring of developer contributions and for ensuring that planning departments are operating efficiently.
If the government does not take steps to ensure this then housing delivery in certain areas of the country – often areas where demand is highest and affordability most constrained – will likely continue to face blocks, threatening wider housing ambitions.
The first months of this government have been a positive start for the home building industry. If the government commits to reaching its housing targets, we will see huge
increases in economic growth, jobs, tax receipts and community benefits.
