Social housing in London contributed £27.8bn to the city's economy in 2024, even after accounting for housing benefit, according to research commissioned by the G15 group of housing associations. The study underscores the economic value of stable, affordable housing and prompts calls for a renewed focus on housing as essential infrastructure.
Social housing's economic contribution
The G15, which provides social and affordable homes for about one in ten Londoners, commissioned the research to assess the economic impact of those living in social housing. The methodology compared the lives of people in social housing with those lacking stable and affordable accommodation. The findings indicate that stable housing reduces demand on public services, improves physical and mental health, and increases the likelihood of tenants remaining employed and contributing economically.
The £27.8bn figure represents a significant injection into London's economy, demonstrating that social housing is not a cost but an investment. This perspective aligns with historical views, such as those of postwar Labour minister Nye Bevan, who championed housing as a service rather than a commodity.
Key workers and city diversity
The report highlights that key workers, including nurses, care staff, and retail employees, constitute about 65% of London's social housing population, compared to 40% of the city's overall population. These workers were celebrated during the Covid-19 pandemic for keeping the city functioning, yet many would struggle to afford living in London without social housing. The research notes that relocating to the city's outskirts would add thousands to their commuting costs and hours to their workdays.
London's city centre has historically maintained a mix of rich and poor, unlike Paris, New York, or San Francisco. In many inner London boroughs, between 20% and 40% of households live in social housing. However, a steady decline in social housing availability raises concerns about the city's diversity and resilience.
Policy implications and future needs
The idea of social housing as economic infrastructure is not new. Gordon Brown and Tony Blair argued in the early 2000s that public services would deteriorate if essential workers were priced out of urban centres. Blair shifted provision from councils to housing associations, and the coalition later commercialised the model. Now, Andy Burnham, Mayor of Greater Manchester, appears to advocate returning councils to a central role.
In a 2024 interview with the London Review of Books, Burnham stated: “If you read Nye Bevan’s speeches, as I do, if you read his speech that was the postwar Housing Act, second reading, he talked about how housing needs to be thought of as a service, not a commodity to be traded and sold, a wealth creator. Everybody needs it, it’s an essential service. And it was interesting how he positioned it like the NHS. And so that’s the philosophy that we need.”
Housing charities estimate that 90,000 social homes are needed annually in England, yet no major party has proposed building at that scale. The G15 report reinforces that affordable housing is vital for the country's economic resilience, and current building targets are insufficient to address the crisis.
