Building on brownfield: The economic impacts of fulfilling housebuilding potential
As the King of the North has been crowned by the Labour Party and the keys for Number 10 handed over, Andy Burnham begins to set out his policy platform and vision for the country. He has already made it clear that council housebuilding will be a core pillar of this platform. Cebr’s new research for the Green Britain Foundation explores just this.
In a political discourse that agrees on almost nothing, the current housing crisis and need to build more is as close as anything to a consensus. Near-unanimous, cross-party agreement exists around inadequate housebuilding, leading to persistent, chronic under-supply. The only real argument revolves around how to solve this problem.
To answer this question and demonstrate the potential economic impacts of doing so, the Green Britain Foundation (GBF) commissioned Cebr to assess England’s housebuilding potential. Our research focussed on the least controversial land to build on – brownfield sites already identified by local government as suitable for residential development. These previously-developed sites avoid the green belt, preserve habitats and biodiversity, and support denser, lower-carbon communities.
What does the brownfield opportunity look like?
Cebr’s research benefitted from a near-decade old legislation: the Town and Country Planning Regulations 2017. This obligates every local planning authority to publish a register of all identified brownfield sites, that combined form the nationwide English brownfield register (unfortunately, consistent data is not published for other UK nations). This creates a substantial dataset identifying all previously-developed sites, such as old factories, depots and car parks, that are suitable and available for new housing development.
Cebr found there is sufficient identified brownfield land to accommodate approximately 1.4 million new homes nationwide. This volume of housebuilding represents almost the totality of the Labour government’s objective to deliver 1.5 million new homes this parliament, and is equivalent to a 5.4% uplift on the current total English housing stock. For about half of potential brownfield homes (674,000) the process is even easier, as planning permission has already been granted for these sites.
The economic impacts of housebuilding
Having established England’s brownfield housebuilding potential, Cebr robustly assessed the economic benefits of delivering on it. Our modelled scenario was simple at its core: building all 1.4 million homes over the next decade, with a ramp-up of construction throughout the period. Analysis was conducted at individual local authority level, splitting homes between private market and affordable tenures in line with actual building patterns over the past five years. Comprehensive datasets of previous similar construction projects were leveraged to assess the amount and profile of spending required.
In total over the decade delivery timeline, brownfield housebuilding would directly generate £88.8 billion in gross value added for the UK economy. This equates to an average £8.9 billion economic contribution per year (with impacts much larger towards the end of the delivery timeline). Brownfield housebuilding would directly support 1.35 million FTE job-years over the ten-year period, or 135,000 FTE jobs per year on average. Almost one-third of direct economic impacts are generated in London, with the South East and North West the next-strongest regions.
Direct impacts were integrated into Cebr’s bespoke economic models to quantify aggregate impacts. This incorporates a further two layers of economic activity: the supply chains that support brownfield development and the spending of the workers paid to deliver brownfield homes. With these additional impact layers brownfield housebuilding supports an aggregate of £259.3 billion in gross value added across the ten-year delivery timeline. This equates to an average value added of £25.9 billion per year, equivalent to 0.9% of the overall UK economy. On aggregate, 3.7 million FTE job-years are supported throughout delivery, an average of 370,000 FTE jobs annually.
Not just a London story
Whilst the economic impacts of brownfield housebuilding are strongest in the capital this is far from just a London phenomenon. The North West and West Midlands could host 215,000 and 189,000 brownfield homes respectively, as Birmingham alone has identified enough sites for more than 105,000. Manchester, Salford and Leeds all rank within the top ten local authorities in the country in terms of brownfield housing potential. Together, the Midlands and the North account for almost two-fifths of potential economic activity.
Because brownfield tends to concentrate in areas that have struggled more economically in the past, brownfield housing development is regeneration aimed at exactly the places left behind. The most disadvantaged tenth of English local authorities in terms of access to housing host over one sixth of the potential brownfield homes nationwide. Further to this, the most deprived tenth overall would account for almost one fifth of total economic impacts. In terms of employment, the tenth of local authorities with the highest unemployment rates would benefit from over one fifth of FTE jobs supported by housebuilding.
Where do we go from here?
Cebr’s research highlights the transformative economic opportunity represented by brownfield housebuilding. The GBF deployed this research as a core component of their most recent Babelfish publication, which was publicised at a launch event and has underpinned engagement with policymakers. Should government authorities choose to act on this opportunity, the development would support substantial economic output and employment up and down the country, while leaving us 1.4 million homes better off in the process.