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Household Projections for England

Tuesday, 30 October 2018 14:38

The number of households in England is projected to increase by 4.0 million (17%) over the next 25 years, from 22.9 million in 2016 to 26.9 million in 2041. This equates to 159,000 additional households each year compared with the 210,000 previously projected.  Why the decrease?

New figures from ONS and Government explain that the methodology has changed.

The new projections just look at the last two censuses, rather than going back to 1971, meaning reduced household formations due to the recession accounts for 20,000 of the drop. It is so far unclear what other demographic assumptions account for the remaining 30,000.

Of course household projections are not a prediction or forecast of how many houses should be built but acknowledges through a variant database the impact of reduced household formation rates amongst young people in the recession. It reinforces the need to build homes which meet local needs, especially in terms of them being affordable across the range of incomes in the area concerned.

The Government has a manifesto commitment to increase the rate of delivery of new homes to 300,000 homes per year. The justification is challenged by CPRE in terms of both:

a) Evidence of the construction industry’s willingness and capability to deliver that number and sustain delivery over time, and

b) An honest assessment of the number of homes that need to be built in order to sustainably reduce house price inflation (taking account of the other influences on house price inflation, which should simultaneously be addressed) and a commitment to keep that assessment under review.

CPRE believes that targets should only relate to the provision of homes that directly meet local needs (household growth plus the needs of specific people currently in unsatisfactory accommodation) and that those homes should be affordable across the range of incomes in the area. Homes planned to meet market demand beyond this or to meet growth aspirations should not be a part of the target against which delivery is measured.

It is likely that the Government view will be that housing targets should not be reduced just because household growth projections have reduced. Is this justifiable?

The local assessment of housing need carried out by Local Planning Authorities has two elements:

i. The ONS projections of household growth, and

ii. An uplift, based on the relationship between house prices and incomes (a proxy indicator for every source of housing need other than simple household growth including existing shortfall of homes from under delivery in previous year.

These new figures should be taken into account when LPAs calculate the new round of SHELAAs (Strategic Housing and Employment Land Availability Assessment).

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