The Local Multiplier 3 (LM3) reveals how much investment a housing scheme brings to an area by analysing where the project income is spent and re-spent in the local economy.
LM3 tracks how much money is retained within the specific local area by monitoring which money goes to suppliers, subcontractors and employees, and where they then re-spend the money.
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The system has been recently trialled in Pennyburn, North Ayrshire.
Lovell developed 22 homes for Irvine Housing Association at the site.
LM3's spending analysis showed for every £1 from the gross project income, an additional £1.03 was generated within a 25 mile radius of the project.
Overall, the total income from the project was £3.8m.
Developed by the New Economics Foundation social and economic justice think tank, LM3 will enable Lovell to work out the 'multiplier effect' of its housing projects across the country.
Lovell sustainability co-ordinator, Alice Flint, said: "The LM3 tool allows us to assess the economic contribution our projects make at a local level and also identify areas where we can improve the impact of this spend in the local area.
"The value of the LM3 tool is that it enables us to measure and monitor how much of the spending from our projects stays in the local area and boosts the local economy."
(LM/CD)
