Home economics: The role of housing in rebalancing the economy

Article

This report looks at the role of housing in rebalancing the economy. It analyses the differences between cities and regions, and assesses how short, medium and long-term housing trends can have a vital influence on economic performance at the subnational level.

Housing has a range of significant effects on economic performance at the national, subnational and very local level. These range from direct impacts, like construction and rent, through to indirect effects, such as household spending and labour market mobility. Housing can have wider regeneration impacts which affect the relative competitiveness and investment potential of an area and – in the worst cases – the social and environmental costs of concentrated deprivation.

In terms of how housing policy interacts with economic policy, the report highlights four main problematic areas, and makes recommendations to address each.

  1. Problems with planning and coordination where local planning departments lack the capacity and scope necessary to address the more strategic needs of functional economic areas.
  2. Problems with housing finance where current policies favour those areas with high housing demand and inhibit public investment where the residential offer could be critical in attracting inward investment and skills.
  3. Problems with land supply in key cities and places where there is scope for rapid economic growth.
  4. Problems with regenerating housing and neighbourhoods where there is low demand and weak connectivity to the local labour market.

Many of the recommended measures focus on giving increased powers and responsibilities to subnational bodies, such as local and combined authorities and local enterprise partnerships (LEPs) to enable and encourage strategic planning and targeted action at the local and regional levels.

Related items

  1. A row of international flags flying in the breeze outside a building in Paris on a sunny day

    Diversifying diplomacy: UK strategy in a fragmenting world

    How the UK might build more durable international partnerships in energy, defence and technology.
  2. A 'To Let' sign outside a row of houses on a residential street, UK

    High housing costs in the private rental sector: The case for action

    45 per cent of all private renters in the UK have unaffordable rents. It's time for the government to act to limit rent increases.
  3. A wide shot of several large commercial vessels, including oil tankers and a survey boat, floating on turquoise water. In the background, an industrial shoreline with numerous smokestacks and refinery infrastructure is visible under a cloudy sky. Concept of global logistics, maritime industry, and international trade.

    Price caps and economic stability: How to manage the Iran war energy shock?

    The Iran war energy shock will impose significant costs on the UK economy, even if the government does not offer a universal support package.