"Q: What happens to housing affordability when new homes are built in the local area? A: ‘Chains’ of moves allow multiple households to improve their housing situation with each new home provided"

"What happens to housing affordability when new homes are built in the local area? Recent economic papers have tried to answer this question, and a new Greater London Authority report summarises their findings...

    "The first overall finding from these papers is that new housing supply tends to attract residents from the local housing market, initiating ‘chains’ of moves that allow multiple households to improve their housing situation for each new home provided....
    "New homes tend to be more expensive so the 1st moves into them tend to be by high-income households. But some of them free up existing homes when they move, and the resulting chains increase availability of low-cost as well as high-cost homes across the housing market as a whole....
    "Housebuilding can also affect demand via improvements to local amenities and even reductions in crime. If big enough relative to the existing context, these effects can outweigh supply impacts of new homes and push up local prices and rents (while still lowering them elsewhere)....
    "This new research sheds light on existing evidence about housing market filtering, housing mobility, gentrification and more. Very broadly, I think it all emphasises how the issues of mobility and choice are inextricably linked to questions of supply, price and affordability....
    "Conversely, building new market-rate homes in high-income areas reduces gentrification pressures elsewhere. And finally, this research shows that new social housing provides the most immediate and direct benefits for low-income households."

~ Jim Gleeson, summarising the new Greater London Authority report