Water-smart communities could prevent £20bn loss to the economy from unbuilt homes

Water scarcity is a “critical obstacle” to meeting the Government’s housing targets, and could cost the UK economy £25bn over the next five years, in missed opportunities to deliver housing developments.

That is according to work undertaken by Enabling Water Smart Communities, an Ofwat Innovation Funded project. The headline number includes £18.3bn in lost construction-related economic activity, £6.3bn in diminished land value uplift, and £344m in reduced productivity gains in high-value areas. The research found 61,600 homes could go unbuilt in the east and south east of England over the next parliamentary term due to lack of water capacity, which is around 40% of the Government’s 1.5m new homes target.

However, Enabling Water Smart Communities presented a solution for the majority of the harm; it found implementing water-smart standards in new developments could recoup up to £20bn of the economic loss, by enabling the construction of nearly 50,000 homes over the same period. The report estimated that water efficiency improvements of 30% would allow for 43% more homes to be built, without increasing water demand in constrained areas.

Catherine Moncrieff, policy engagement manager at CIWEM, one of the project’s core partners, said: “By adopting water-smart housing standards and integrated water management, we can build resilient communities and create billions in economic value. Regulatory reforms would represent a quick win for a government wishing to address water challenges and meet vital housing targets.”

She added that while planned new reservoirs are vital for alleviating water scarcity and ensuring future resilience, “they won’t deliver significant relief for another ten to 15 years. Water-efficient housing solutions are essential to bridge the gap and ensure sustainable living as communities expand.”

A public attitudes survey undertaken as part of the project revealed widespread public support for water-saving measures, with over 75% supporting recycled water for non-potable purposes.

• The full Enabling Water Smart Communities report can be downloaded here: https://www.ewsc.org.uk/action-areas/case-for-water-smart-housing