Mayor Sadiq Khan Warns Housing Crisis is Dragging Economic Growth of London…reports Asian Lite News
Mayor Sadiq Khan has sounded the alarm on the detrimental economic impacts of London’s housing crisis, emphasizing the need for greater investment in affordable housing. New economic analysis released by City Hall, London Councils, Trust for London, and the G15 reveals that a mere one per cent increase in housing affordability could boost London’s economy by over £7 billion over the next decade.
The Mayor highlights this report as evidence of affordable housing’s importance not only for residents but also for the overall economy. He argues that creating more affordable homes would support local businesses by making it easier to recruit and retain workers, reduce homelessness, and encourage households to invest in other parts of the economy.
“Affordable housing is essential for a thriving, resilient economy,” Khan said. “High rents and property prices not only hurt Londoners but hinder the growth potential of our city.”
Khan is expected to make the case for substantial government investment to address this critical issue, proposing initiatives such as a devolved City Hall Developer Investment Fund and a relaxation of borrowing limits on local councils to help them build more affordable homes. This call comes against a backdrop of soaring construction costs, high-interest rates, and the lingering effects of Brexit, which he says have created the “most challenging environment for housebuilding since the 2008 global financial crisis.”
Khan’s tenure as Mayor has already seen progress, with more council homes started than at any time since the 1970s and an ambitious target to build 40,000 new council homes by 2030. However, he warns that without further national support, London’s ability to meet housing demands and strengthen the economy will remain limited.
The newly published research, conducted by NERA Economic Consulting, also highlights how improved housing affordability could yield economic benefits by increasing productivity and encouraging higher take-home incomes. A modest one per cent improvement in affordability could result in a £730 million annual boost to London’s economy, underscoring the connection between affordable housing and economic resilience.
Claire Holland, Chair of London Councils, and other housing advocates echoed Khan’s call for action, noting that the housing crisis is holding back productivity and affecting Londoners’ quality of life.