Rescue, recovery and reform: housebuilding and the pandemic

Summary

This country is heading for the worst recession in over three hundred years. In April, GDP suffered its sharpest fall on record. The number of people claiming unemployment benefits more than doubled from May to March and more than a quarter of the workforce are now on the furlough scheme.  

The housebuilding sector will be badly hit by worsening economic conditions. We cannot afford a collapse. The industry supports millions of jobs, is made up mainly of small businesses and builds the homes we need to live in. The Government must invest now in social housing to protect jobs and businesses. 

England’s housebuilding industry has proven particularly vulnerable in a weak economy. Looking back to the last big recession in 2008, there was a major decrease in housebuilding. As people stopped buying homes, big builders stopped building and work dried up for their contractors. Thousands of small builders went under. The result in the following years was job losses, fewer homes built and a worsening economy. We can’t let that happen again. We can’t build our way out if there’s nobody to do the building. 

Shelter commissioned Savills – experts in the industry – to assess the impact of the weakened economy on housebuilding. Savills have predicted that up to 244,000 jobs will go in the first year, and as many as 300,000 fewer homes will be built over five years. This is at a time when every job, and every home, counts more than ever. 

But by investing in social housing, the Government can help avoid this. There’s a clear moral argument. Everyone should have a safe and secure home, especially in the midst of a global pandemic. But there’s also a clear economic case. When the private market dries up, government grant in social housing can deliver a direct and vital shot in the arm, protecting jobs, supporting SMEs and building us the genuinely affordable housing we so desperately need.  

Right now is the time to invest. As the Prime Minister suggests, we must ‘build, build and build’ our way out of the recession and invest now to support the economy. During a downturn investment in social housebuilding is the most obvious, effective and proven way to stimulate jobs and economic activity.