Why certainty in housing investment is vital as we emerge from the coronavirus crisis

Tristan Carlyon, 22 June 2020

We all understand the difference that certainty makes in our lives. The security of a permanent contract compared to insecure seasonal or zero-hours work. The confidence that comes from being able to plan for the future, and the sense of freedom and agency that confidence brings. We understand that, and tend to seek out security and certainty in our relationships and employment.

So it’s not surprising that we also seek out this security from our homes. We understand the positive impacts of living in a secure and affordable home, being able to build a life, and we know building more of these homes will give more people the chance to have that certainty. But the benefit isn’t limited to the people who actually live in these homes.

Investing in building new homes has a positive impact at a local, regional and national level, driving economic growth and supporting jobs. Our members built 45,604 homes in the financial year 2018/19. This activity directly added an estimated £2.4bn to the national economy, supporting more than 43,000 full-time jobs.

This is a great contribution – but we could be doing even more. One of the issues that holds the construction sector back is a volatile housing market; the uncertainty this causes tends to result in a reluctance to invest in new technologies and skills. As a result the industry is less efficient than it could be, with productivity levels typically 20% below those of the wider economy.

But what if some of that uncertainty could be removed? Given that affordable homes accounted for more than a quarter of new build activity last year, what might happen if the funding of such activity by government could be guaranteed over a longer time period than the 3-4 years grant programmes typically run for? This is something the government has begun to test through the strategic partnerships it has formed with some housing associations. What if this approach was extended out to ten years and became a universal feature of affordable housing funding?

We commissioned Cast, the construction and real estate consultancy, to look at the implications of extending funding certainty to a ten-year cycle. They found that the increased confidence to invest in technology, skills and the workforce could result in a 70% uplift in sector productivity.

And it’s worth remembering that this investment would be spread across the country, because we need new affordable homes everywhere. Increased certainty in affordable housing funding will not just help deliver more homes, but will also benefit communities through the creation of more secure, skilled jobs.

So we wouldn’t just be looking at building the homes we need. We’d also be looking at upskilling thousands of workers across the country, guaranteeing their employment, putting money in their pockets and into the tills of businesses in communities from Cornwall to Carlisle – increasing the certainty in their day-to-day lives. We’d be looking at a genuine boost to local and regional resilience, reviving and revitalising communities which have too often faced underinvestment and uncertainty.

As we emerge from the crisis of the pandemic, re-evaluating the contribution we as individuals and as a sector can make to building a better world, let’s not miss this chance. A chance to revitalise communities and create a construction industry ready to meet the challenges of the twenty-first century. A chance to drive economic recovery and boost employment. And a chance to build more of the affordable and secure homes we need – homes which will, in turn, bring certainty to the lives of those who live in them.

Who to speak to

Tristan Carlyon, Head of Research and Analysis