The Impact of Poor-Quality Housing on UK Society

Between the ages of eight and thirteen, I lived on the Hexham Road estate, regarded as one of the most socially and economically deprived areas in Reading. It’s a town like many others across the UK, polarised by areas of affluence and deprivation. At that young age, I was aware of the perception of our estate but I’m not sure I understood the impact our living conditions had on the people who called it home. Let alone the wider societal and economic impacts.

I have been reflecting on this more recently again. As an Urban Regeneration Lead within Stantec, we help address so many of the issues I faced personally almost thirty years ago. These are still present and impacting so many members of society. The new government is facing a huge challenge around quality in our housing infrastructure, specifically within the portfolios of councils and registered providers nationwide.

To solve any problem, we have to understand the brief, so what is the impact of poor-quality housing? And what can we do, as agents of change, to help solve these issues?

Health Implications and Economic Costs

It is widely recognised that the most direct consequence of poor-quality housing is its impact on health. For my mother, respiratory issues plagued her day-to-day life. This was as a result of damp in our flat due to poor ventilation. She was a proud woman, who worked hard to provide for us all but was frequently unable to work due to her poor health. Fortunately, we didn’t suffer from other common challenges of inadequate heating or overcrowding, which are equally impacting health and vulnerability for many residents living in poor quality homes today.

These conditions lead to higher healthcare costs, borne by the National Health Service (NHS). The Building Research Establishment (BRE) estimated that poor housing costs the NHS around ￡1.4 billion per year in England alone. This figure includes the costs of treating conditions directly attributable to poor housing, such as asthma and chronic obstructive pulmonary disease.

The indirect costs are also significant. As proved by my mother, poor health reduces productivity, which in turn leads to lost earnings and reduced economic output. The Health and Safety Executive (HSE) has reported that work-related ill-health costs the UK economy ￡15 billion annually. While not all of this can be attributed to housing, poor living conditions are a notable contributor.

Educational Outcomes and Long-term Economic Impact

The attendance at school in my community was a big issue, with many of my friends either not attending school due to ill-health or simply truanting. Lots of my friends from the estate cite that their truanting patterns were initially triggered by long periods off sick, compounded by the fear of not being able to “catch-up” on their return. ?Poor quality housing conditions therefore can have a significant role to play in this.

Today, the Children’s Commissioner for England reports that around 1.3 million children live in poor quality housing, which hampers their educational attainment and perpetuates the cycle of poverty.

In the long term, these educational deficits translate into a less skilled workforce, and are therefore detrimental to the economy. Lower educational attainment reduces employability and earning potential, leading to higher welfare dependency and lower tax revenues. The Joseph Rowntree Foundation estimates that the UK could save ￡25 billion over the next 20 years if educational outcomes were improved for disadvantaged children.

Social Stability and Crime

Poor quality housing and social deprivation exacerbates social instability and crime rates. Overcrowding and inadequate housing can lead to increased stress and conflict within households and communities. The lower property rates that result, then deter investment and perpetuate poverty. Pride in place falls, as crime rates and anti-social behaviour rises. We are all familiar with this spiral, but from my experience, the perception of crime in our estate was worse than the reality. Sadly though, the labels stick, and policing levels rise in response.

Policing, judicial processes, and incarceration all require significant public expenditure, so surely addressing the quality of housing in these areas will help break this cycle, fostering community stability and potentially also economic revitalisation.

Housing Market and Economic Efficiency

The prevalence of poor-quality housing distorts the housing market and reduces economic efficiency. Substandard housing is cheaper, creating a market where low-income individuals and families are forced to choose between affordability and quality. This can lead to higher demand for poor quality housing, discouraging investment in better quality, more affordable housing solutions.

Poor housing conditions contribute to increased residential mobility, as people move frequently, in search of better living conditions. I remember well, the constant churn of people in and out of our estate and my school. It meant you didn’t know your neighbours. It was harder to feel part of a community or feel responsible and proud of where you called home.

This transience disrupts local economies, reduces community cohesion, and increases public service costs, such as higher demands on social services and educational systems, which must adapt to a constantly changing population.

Energy Efficiency and Environmental Costs

Poor build quality, a lack of insulation, aging heating and lighting infrastructure, all leads to a lack of energy efficiency in poor quality homes, as well as higher energy costs for residents and increased carbon emissions. The UK has committed to ambitious targets for reducing greenhouse gas emissions, and improving housing quality is a key component of this strategy. The Energy Performance Certificate (EPC) ratings of homes indicate that a significant proportion of UK housing stock is below acceptable standards for energy efficiency, despite grants and investment programmes in recent years.

Improving energy efficiency reduces energy costs for residents, freeing up household income for other expenditures and stimulating economic activity. It supports the UK's environmental goals, reducing costs associated with climate change and environmental degradation, while in tandem it creates jobs in the construction and energy sectors, providing a further economic boost.

Public Expenditure and Policy Implications

I had the pleasure of spending some time with the leader of a local London borough council a few months ago, who told me some mind-boggling facts relating to the pressures around lack of affordable housing stock. At present there are over 3,700 people on the priority list for housing in his borough, with some people living in temporary accommodation for 10 years! The bill for this is ￡13m per year for this area alone and, across London, this equates to approximately ￡400m per year! It’s important to acknowledge that the monetary values quoted here are what is required simply to tread water, not to build more homes.

Clearly then, addressing the shortfall in affordable housing requires significant public expenditure, but the long-term savings across so many public service areas, plus the economic gains surely justify these investments.

I firmly believe that planning reforms, including the reintroduction of mandatory housing targets, will stimulate housebuilding in the UK, and will, in turn, enable us to enhance housing quality through new build, retrofit and refurbishment programmes. But it does need considered investment.

From recent research we have conducted at Stantec we know that on average the Government has around ￡7bn per annum to spend on regeneration across the UK. The new government will have the opportunity to repackage this level of funding and I am pleased to hear that this will include a consolidation and simplification of the bidding process, funding streams and administration. If this happens quickly and alongside planning reform, plus Local Authority investment, I think we will see renewed excitement by authorities looking to maximise funding allocation from Central Government.

So, what can we do??

Addressing all the issues I have identified here requires a comprehensive approach, involving policy reforms, investments in housing improvements, estate regeneration, and community support programs.

Economists can certainly build a compelling business case around the benefits set out in this paper, and what refurbishing one poor quality home could deliver for its residents, what an estate renewal programme can deliver for its community and what a national housing enhancement programme can achieve for UK PLC. But what they can’t do is deliver this in cash to an investor. Instead, we need national and local government leadership to help build confidence, working to de-risk investment and provide certainty. We also need to align environmental and social drivers. In my opinion, we’re starting off in the right direction to secure this.

Across our teams in Stantec, we are already supporting local authorities in securing government funding for and delivering regeneration. We are bringing together our public and private sector clients to collectively support housing improvement and delivery in the most efficient manner, that also maximises impact. So, we can all see housing improvement as an investment, not a cost.