By A new generation of genuinely affordable housing for London
London residents and professionals are victims of a housing crisis more intense than in any other city in the UK. Rents consume salaries, overcrowding is normalised, and many families live in insecure accommodation. More than 100,000 children are now in temporary accommodation, a number that is shocking in a national context, let alone in a single city.
This is both a social and an economic emergency: a city cannot function well when much of its workforce, including key workers, live in insecure or unsuitable accommodation. If London is to sustain its role as the UK’s economic engine, good quality affordable housing needs to be regarded as core infrastructure, alongside transport, schools and utilities.
Why ‘Genuinely Affordable homes’ are different
Not all affordable homes provide strong and secure foundations for a stable economy. Genuinely affordable homes let at Social Rent or London Affordable Rent levels are more beneficial than other forms of subsidised housing as they are explicitly tied to local incomes, rather than set at a discount of market values. As such, they are designed to be genuinely affordable for people on low and modest wages, not only for those who can already afford to live in the capital.
These homes also provide security of tenure and therefore stability. It allows families to put down roots, plan their lives and invest in their local area. That stability supports steady employment and reduces the churn that undermines educations, GP practices and local businesses. By contrast, the current system relies heavily on subsidising private rents through benefits, incurring significant costs without providing secure family homes. Housing security and affordability go hand in hand, otherwise the cost to the taxpayer increases in line with private rents without bringing the social and economic benefits of secure accommodation. This is however what genuinely affordable housing offers, underpinning its value.
Genuinely affordable housing also reduces reliance on the most volatile parts of the private rented sector. When households are able to move from precarious, expensive rented accommodation into well managed and secure social homes, they gain both disposable income and peace of mind. The money that is no longer swallowed by rent is spent in local shops, on transport and on services an indirect boost to London’s local economies. At the same time, the overall cost to the taxpayer is reduced, since fewer households require subsidies to cover high, and ever increasing, private rents.
Public services need stable homes
The link between housing and public health is now well documented. Overcrowded, damp or insecure homes contribute to physical and mental ill health. That feeds through into higher costs for the NHS and social care, as well as higher levels of sickness absence for employers.
Conversely, access to good quality, secure affordable housing supports healthier lives. It reduces stress, improves educational outcomes and allows older residents to remain independent for longer. From an economic perspective this means fewer avoidable hospital admissions, better school attendance and attainment and a more productive workforce.
When we look at housing in this way, it becomes clear that good quality secure affordable homes are part of the city’s social infrastructure in the same way that public transport, GP surgeries and schools are. The difference is that affordable housing is not funded or planned with that status in mind.
Housing as infrastructure, not a revenue cost
Recent research for Shelter and the National Housing Federation estimated that building 90,000 social homes a year would deliver a net benefit to the Treasury over 30 years. The research demonstrates that investment in social housing more than pays for itself when savings in housing benefit, health and temporary accommodation are taken into account, alongside higher tax receipts from a more secure, productive workforce.
Hence the growing call for housing to be treated as infrastructure within government spending frameworks. Energy, transport, water and waste projects are already recognised as nationally significant infrastructure, eligible for long term funding settlements and bespoke delivery mechanisms. Housing, by contrast, is still largely confined to shorter cycles and fragmented grant regimes.
Investors and lenders increasingly view affordable housing as a long term, stable asset class. For them, reclassification would not be a radical shift so much as an alignment of public policy with market reality. It would enable more predictable pipelines of council and housing association schemes, give councils greater confidence to plan for the long term and support the integration of housing with transport, energy and social infrastructure in new developments.
Putting the solution into practice
London already has an ambitious programme to increase the supply of genuinely affordable homes, supported by the Mayor and many boroughs. That progress is welcome, but the scale of the challenge suggests that delivery needs to move beyond individual funding rounds and one off initiatives.
If we accept that genuinely affordable housing is essential to London’s economic resilience, we should treat it in the same way as we treat investment in new rail lines or strategic energy projects. That means long term programmes, not sporadic grants; planning policies that give weight to genuinely affordable, secure homes in locations where they support labour markets and public transport, and better alignment between housing, health and employment strategies at city and borough level.
For practitioners in planning and development, there is an opportunity to make the economic case for social and council housing more clearly through local plans, infrastructure delivery strategies and individual schemes. It also challenges us to design and affordable homes that are well integrated with the wider city, so that they support mixed communities and strong local economies.
For London to remain a place where people on ordinary incomes can live, work and build a future, affordable housing cannot sit at the edge of the infrastructure conversation. It has to be part of the core investment that allows the capital’s economy to function well, now and in the decades ahead. If this model is adopted, the benefits will extend far beyond individual households in London, but it will lift economic output across London and the UK.
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