Building new luxurious properties makes even lower-income housing cheaper, Metropolis Corridor finds
A brand new research be aware from the Greater London Authority, based mostly on numerous items of financial analysis, examined the impacts on affordability of recent housing provide.
It discovered that the constructing of recent properties helped to extend the quantity of inexpensive choices, even when the brand new properties had been dearer or situated elsewhere in London.
It mentioned that market-rate properties helped make cheaper housing extra inexpensive by “creating chains of vacancies and moves that can reach across an entire housing market area”.
“Building relatively high-cost new homes in one area can lead to increased availability of low-cost housing in another area because local housing markets are not highly segmented and moving chains link one segment to another,” it mentioned. “These moving chains improve the availability and affordability of housing throughout the range of prices and rents, including for low-income households.”
“Building market-rate housing therefore indirectly increases the availability of homes affordable to low-income households, although not as directly as building social housing and other kinds of affordable housing.
“While all kinds of new homes ultimately improve the availability of housing across the income spectrum, new social housing provides the most immediate and direct benefits for low-income households.”
It additionally mentioned that these looking for inexpensive housing normally ended up being hit the toughest by an absence of housing for higher-income individuals.
“When demand for high-cost homes is not met by new supply it is primarily low-income households that lose out, because low-income households benefit from the construction of even high-cost homes while high-income households can afford to satisfy their housing needs even in the absence of new supply,” it mentioned.
The be aware added that, if the properties are inbuilt lower-income areas, it could possibly result in gentrification, but when the properties are inbuilt areas which can be already dearer then it could possibly scale back the quantity of gentrification.