Increase in house building delivers huge boost to UK economy

24 Jul, 2018

Increase in house building delivers huge boost to UK economy

Industry now generating £38bn a year and supporting 700k jobs

The 74% increase in house building activity in the past four years has provided a huge boost to the UK economy. Research in a new report by planning and development consultancy Lichfields shows that the house building industry in England and Wales is now worth £38bn a year and supports nearly 700,000 jobs. House building activity contributes economically in different ways including providing jobs, tax revenues and contributing funding for local infrastructure and communities. And with Government targeting further increases in supply, the knock-on benefits are set to increase still further.

The report shows that last year the house building industry;

  • Supported 698k jobs, including 239k direct (18% of UK construction industry)
  • Generated £2.7bn in tax revenues (via SDLT, Corporation tax, NI, PAYE etc)
  • Provided £841M towards infrastructure (incl £122m for new/improved schools)
  • Spent £11.7Bn with suppliers (90% of which stays in the UK)
  • Invested £12bn in land for new homes
  • Agreed 50,000 affordable houses through s106 agreements worth over £4bn

The report also shows the impact the big increases in housing supply have had. Since Lichfields last ran the ‘Economic Footprint’ report for HBF in 2015[1], the economic activity generated has about doubled (from £19.2bn to £38bn); as have the figures for spend with suppliers (£5.5bn/£11.7bn); tax revenues (£1.4bn/£2.7bn) and affordable housing provision (£2.3/£4bn). This is in large part due to the 74% increase in housing supply from 124k in 2012/13 to 217k last year*. With Government now targeting 300k a year in England, the knock-on benefits of increasing housing supply further are quite clear.   Delivering on that aspiration would result in an additional;

  • £14.2bn in economic activity
  • 260k jobs created
  • £1.1bn in tax revenue
  • £384m investment in infrastructure

The industry is urging Government to continue to improve the policy framework that has allowed output to grow in recent years, in particular by;

  • Delivering further improvements to the planning process. The NPPF-based planning system has been central to providing more land for more homes to be built, but more needs to be done to speed up the start-to-end planning process and help builders to get on site and building more quickly.
  • Providing certainty on the future of the Help to Buy scheme post 2021. The scheme is underpinning demand for new homes at a time that the overall housing market has slowed. It has helped more than 160,000 households to buy a new build home, four in five of whom are first-time buyers.

Speaking today, Stewart Baseley, executive chairman of the HBF said;

“The house building industry is a massive driver of the UK economy and makes a huge contribution to communities across the country. While delivering much-needed new homes of all tenures, house builders are quietly creating and sustaining jobs, generating receipts for the exchequer and boosting investment in infrastructure and amenities in villages, towns and cities. As well as becoming ever more reliant on private builders to deliver affordable housing through planning agreements, vast sums are ploughed into new roads, schools and community facilities every year.  

“The unprecedented increases in housing supply in recent years have delivered significant benefits for UKPLC and the industry is investing in more land and people to enable it to go further and build more.

“The industry is calling on Government to work with it to create the policies that will allow it to deliver the government’s ambition of 300k homes a year in England. Delivering more homes will not only help solve our acute housing crisis, but also provide a further boost to communities and economies up and down the country.”   

Matthew Spry, Senior Director at Lichfields said:

“We were delighted to be asked by the HBF to update our original 2015 report. In preparing our analysis we drew upon a wide range of official and well-established data sources, as well as engaging directly with house building companies including to capture information they assemble as part of Corporate Social Responsibility reporting. We have again identified the very significant economic contribution made by house building and how boosting supply to achieve the Government’s aspiration of 300K homes per annum in England will not only help improve access to housing for people across the country but also deliver a significant economic and infrastructure dividend.  It is important that this contribution is properly recognised in planning and investment decisions across central and local government, agencies and Local Enterprise Partnerships.”


For media enquiries, or to arrange an interview, please contact Steve Turner on 020 7960 1606 or 07919 307760.    

Notes to editors

  1. The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. The HBF’s member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies:
  2. Lichfields, the trading name of Nathaniel Lichfield & Partners Ltd, is the pre-eminent planning and development consultancy in the UK. Its specialists deliver insight, innovation and advice to create great places for future generations. It has offices in Bristol, Cardiff, Leeds, London, Thames Valley, Manchester, Newcastle and Edinburgh. It was set up in 1962 by highly-decorated town planner Professor Nathaniel Lichfield and is owned by its staff through an employee benefit trust. It has annual revenues of £22m and employs 220 people across its nationwide offices. Lichfields was RTPI Planning Consultancy of the Year for three successive years - in 2012, 2013 & 2014 - making it the first consultancy to achieve this feat. Lichfields has longstanding expertise on the economic dimension of development and has prepared economic footprint analysis for a wide range of corporates in the property sector.
  3. The government’s housing supply: net additional dwellings statistics, also known as ‘net additions’, are released annually in November for the year to 31 March and track changes in the size of dwelling stock in England due to new builds, conversions (for example, a house to a number of flats), changes of use (for example, a residential house to an office) and demolitions.
  4. The Help to Buy: Equity Loan scheme, since it was launched on 1 April 2013, has helped 158,883 households purchase a new build home (as of 31 December 2017). Most of the home purchases in the Help to Buy: Equity Loan scheme were made by First Time Buyers, accounting for 128,317 (81 per cent) of total purchases. The latest statistics are available here.

[1] The figures quoted for comparison are drawn from the 2015 HBF report which looked at the industry across the whole of the UK. The 2018 research is focused on England and Wales, so not all figures are directly comparable.

The Economic Footprint of UK House Building_July 2018LR.pdf

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