Following news that the government was to back the building of 15,000 more affordable homes, Peter McCormack, chief executive of Derby-based Derwent Living said that the government had recognised the importance of the building and construction industry but much more needs to be done to achieve growth in the economy.
Peter said: “The news today that the government is to make further investment into affordable housing, is a step in the right direction, at a time when it is widely recognised that building and construction is one of the key ways to bring the UK out of the economic crisis. We will be looking at the detail of the chancellor’s proposals to find out just how this will be of benefit.
“It is a start but we need much more housing investment to kick start the economy.”
Figures from the National Housing Federation say that for every £1 of gross value added (GVA) generated through investment in building affordable housing, a further £1.41 is generated in the UK economy through ‘indirect and induced multiplier impacts’ – which directly benefits the organisations working on developments, or through wider involvement in the supply chain.
Peter added: “This represents one of the highest multiplier effects in the UK economy, being greater than that associated with offshore wind investment, financial services and human health services.
“It is clear that investing in affordable housing has one of the greatest impacts on the UK economy and builds a strong case for the government to invest in our sector.”
Derwent Living is an innovative organisation which for some years has built up a commercial element to its business – using profits to deliver much needed affordable housing.
Profits from commercial activity amount to around £2 million per year, enabling the organisation to deliver the 650 affordable homes in its development programme between 2012 and 2014 - mostly without the aid of government funding.
Peter said: “We are continuing to grow and expand our commercial ventures to fund the development of new affordable homes. With government funding, Derwent Living would be able to do so much more.”
This year alone, Derwent Living has a development programme of 220 homes, the bulk of which are being delivered without public subsidy. Aside from the £26m involved in all aspects of the build, these developments directly generate an additional £13million for the regional economy and support 186 jobs. Indirectly they generate another £31million and support 465 jobs in the UK as a whole.
Peter added: “If Derwent Living was able to double its programme and build 500 new properties, aside from £59m investment an additional £30m would be generated and 421 jobs would be supported locally. Indirectly it would mean £70million would be generated and over 1,000 jobs supported across the UK.
“Derwent Living doesn't just provide affordable housing –our turnover will be £50m in 2013 and we now employ 540 people across our entire group. We are involved in construction in the commercial sector too, building new student accommodation, as part of the Uliving consortium, for the University of Essex and the University of Hertfordshire. Our reach is much wider, supporting over 1,200 jobs in the UK economy from our day-to-day activities.”