London housing shortage 'harming economic growth'
London's overheated housing market is stifling economic growth as well as affecting people's living standards.This is according to the National Housing Federation (NHF), which has released a Home Truths 2014: London report outlining the economic benefits of housing supply. It claims that for every home built in the capital, £117,645 is added to its economy.Despite this, only half of the homes needed to accommodate new households are currently being constructed. While 52,500 new households are expected to form each year up to 2021, only 18,310 homes were built during 2012-13.As a consequence of this shortage, homes are becoming increasingly unaffordable. Average house prices in the capital are 16 times higher than the average wage and set to rise by another 43 per cent by 220.Moreover, the shortage of affordable homes is affecting businesses' ability to find and recruit the talent they need. More than 80 per cent of firms across the country said a lack of such properties is hampering economic growth and 75 per cent said it would affect their ability to attract and keep workers.Dave Smith, London external affairs manager for the NHF, said: "London can't continue to be a hub for talent and enterprise if people can't afford to live here. To retain our competitive edge on the international stage, we need housing that is affordable for people on a range of incomes.""If things don't change, London's much-needed economic growth could be stifled and businesses could struggle."Affordability problems are also affecting suburban areas such as Brent, where house prices are nearly 17 times higher than the average salary of £23,280. An average mortgage in this area of the capital requires an annual income of £90,169.The Home Truths report also reveals that the number of working people receiving housing benefit in order to remain in their homes increased more than 104 per cent over the four years up to August 2013.
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