New North of Tyne Mayor must make house building a priority
14,864 jobs supported by industry in the region
A new report released today, based on research carried out by Lichfields for the Home Builders Federation (HBF), shows the huge contribution house building is making to the economy in the North of Tyne. Over 4,700 new homes were provided in the region over the last year, generating over £813m to the local economy.
Ahead of the North of Tyne mayoral election on 2 May, the HBF is urging the new mayor to work with stakeholders to put a plan in place for housing. Housing supply in the region has decreased over the last year, but with the major economic benefits that it brings to the region it should be prioritised.
As well as being a major employer and supporter of local supply chain businesses, new developments make significant contributions towards local infrastructure and amenities through development taxes.
The report shows that in 2017/18, house building was responsible for:
- Supporting 14,865 local jobs
- Delivering over £813m of economic activity
- Generating over £57m of tax, the equivalent of employing approximately 2,450 new police constables or 2,612 newly qualified nurses
- Delivering over £3.8m of spending on new and improved schools, the equivalent of employing 163 additional teachers, or funding 822 additional primary school places
- An investment of over £1.4m in open spaces, the equivalent of 95 ‘pocket parks’
The report also underlines the impact the Government’s Help to Buy scheme is having in the region. Over 3,500 properties have been purchased using the scheme across the North of Tyne since its launch in 2013, with 82% of those purchases coming from first time buyers.
Since the scheme launched, home building has increased by 178% in the North of Tyne. Newcastle upon Tyne delivered a massive 280% increase in housing over this period, followed by 122% in Northumberland, and 116% in North Tyneside respectively.
Over this five-year period, housebuilding in the North of Tyne has generated £520m in economic activity and £36m extra tax.
Stewart Baseley, Executive Chairman at the Home Builders Federation, said; “For too long the vast social and economic benefits of house building have gone unnoticed in our communities. This research shows that the home building industry is delivering much more than bricks and mortar and providing a massive economic boost to the North East. Over the last five years, in the North of Tyne alone, house building has given the economy a £520m shot in the arm and provided much-needed additional funding for local schools and community facilities.
“With the Government’s target to build 300,000 new homes every year until the mid-2020’s, the North of Tyne should continue to see these benefits increase.”
Housing is inextricably linked to the wider health of the economy and it is often referred to as a key barometer of national economic performance. But it is also important to recognise that it also has a range of significant effects on economic performance at regional and local levels too. In particular, house building:
- Drives regional economic growth through its vast and varied supply chains and contracting relationships;
- Generates unrivalled investment multiplier effects with very little import leakage due to the extensive use of local and regional suppliers and services;
- Delivers real jobs both on-site and off-site in associated trades, such as cement production and brick manufacturing, as well as in research and development fields looking at technological innovation areas such as Modern Methods of Construction;
- Creates economic value through new residents as they spend money on goods and services in the local economy;
- Supports labour market mobility wellbeing by enabling local people to move jobs freely and achieve their economic potential;
- Enhances “place competitiveness” and local economic development by improving the perceived competitiveness of specific locations and reducing the costs of mitigating social and environmental problems associated with poor or insufficient housing.
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 For the purposes of this report, the North of Tyne refers solely to the North of Tyne Combined Authority which consists of Northumberland, Newcastle upon Tyne and North Tyneside.
 Ministry of Housing, Communities and Local Government, Green light given to over 80 pocket parks, 15 February 2016