Tag Archives: ONS

Malthouse calls for “more, better, faster” as Gov ignore latest population stats

By Daniel Fryd, Senior Consultant

Government will not change its housing need targets despite official statistics predicting lower household growth than previously thought, it was confirmed last week.

In a consultation report launched at the end of last week, just before the Budget and its slew of other reports was released, the Ministry of Housing, Communities and Local Government (MHCLG) set out its latest position on the standard methodology for calculating housing need. The 19-page consultation contained some fairly complex minor planning tweaks, but the main message was very clear: “lower household projections do not mean fewer houses need to be built.”

This will come as something of a blow to local authorities who have been dragging their heels on getting a local plan in place. Certain councils have been delaying their local plan agreement to meet the housing targets set out in the revised NPPF, in the hope that Government would revise down its housing target resulting from the new ONS figures.

Flawed figures

Back in July the ONS released 2016 household population statistics which suggested a drop in the projected population by 53,000 a year between 2018 and 2028. Areas such as Cambridge and Greater saw significant reductions.

To use these statistics to base house-building targets would be a mistake, the new MHCLG publication says however, and would only lead to fewer, larger households living in more expensive homes built in the wrong places.

Running until 7 December 2018, the consultation sets out how Government and councils should ignore the new projections and use the 2014 statistics as a basis for calculating housing need instead, resulting in a minimal change to housing targets.

What now?

The consultation proposes three key changes:

  • To set out how “2014-based data will provide the demographic baseline for assessment of local housing need”.
  • To clarify that ” the 2016-based projections do not qualify as an exceptional circumstance that justifies a departure from the standard methodology”.
  • In the longer term, to “review the formula with a view to establishing a new method” by the time the next projections are issued”.

Housing minister Kit Malthouse said: “We must tackle the historic shortage of new homes and restore the dream of ownership for the next generation.

“To do this we must build more and better homes, faster, and are committed to delivering 300,000 homes a year by the mid-2020s. These proposals maintain this commitment and crucially give stability and certainty for local authorities, so they can get on with the job of building the homes their communities need.”

Once MHCLG have digested the responses to the consultation and produced a final note in the new year, the move should put to bed the suggestion that revised household projection statistics mean lower targets for housebuilding should be introduced. There has been a lot of talk about hitting the 300,000 new homes a year point. Sticking to the 2016 projections will help make that a reality.

Read more about the latest planning news:

  • Onwards and upwards for extensions? – Read more
  • TCPA proposes 13 steps to deliver truly affordable housing – Read more
  • Government lifts HRA borrowing cap – Read more
  • Letwin Lets Rip in Build Out Review – Read more
  • Budget 2018 Special – Read more

What came first, the chicken or the household projections?

By Vivienne Shirley, Senior Consultant 

The Office for National Statistics (ONS) has released dramatically lower household number projections than previously forecast, causing quite a stir in the planning world. 

The 2014 projection, calculated by the Department for Communities and Local Government (DCLG), stated the number of households would grow by 210,000 a year in England – resulting in 28 million homes by 2041. However, the ONS’s figures suggest there will only be 159,000 additional households each year, leading to 26.9 million by the same point. 

So why such different numbers? 

While the DCLG figures used demographic trends going back to 1971 to produce its figures, the ONS projections are based only on the time between 2001 and 2011. While a trend for households getting smaller can be seen from 1971 onwards, this stopped around 2001 – contributing to the lower household projections. The ONS also assumed a lower annual figure for net migration. 

A fair approach? 

The validity of the new timeframe has caused controversy, with many arguing that the ONS’s method of calculating household projections ‘bakes in’ a period when not nearly enough homes were built, forcibly curtailing the formation of new households. 

Matthew Spry, senior director at property consultancy Lichfields, noted: “The number of households that have formed can only ever match the number of dwellings that there are for people to live in. Statistically a household cannot form if it doesn’t have an extra house to form into.”  

Jim Gleeson, senior policy officer at the Greater London Authority, put it even more bluntly when he criticised the ONS’s approach, tweeting: “This is like saying that when we cut bus services the number of people taking the bus falls so we should cut bus services more.” 

Indeed the increasing number of young people living with their parents into adulthood would probably argue they would prefer to move out and form new households, but are prevented by sky-high house prices due to high demand and lagging supply. And it’s not just millennials who are affected. Data from listing site SpareRoom showed the number of individuals living in flat shares between the ages of 55 and 64 rose by 343% from 2011 to 2016 – again, it’s questionable if this is by choice. 

Lower housebuilding targets? 

Though some observers have embraced the new projections and claimed they prove the government’s aim of building 300,000 homes a year is too high, it is unlikely this figure will be lowered.  

If the new projections are used as the basis for the Standard Method of calculating housing need, included in the revised NPPF, this would mean only 214,000 new homes each year – prolonging the trend of low house building and high prices, and continuing to bog down the formation of new households.  

But the government said in July it will consult on changes to the standard methodology to address the fact the projections are not consistent with achieving 300,000 homes per annum, stating: “It should be noted that the intention is to consider adjusting the method to ensure that the starting point in the plan-making process is consistent in aggregate with the proposals in [last September’s] consultation and continues to be consistent with ensuring that 300,000 homes are built per year by the mid 2020’s.”  

This is good news. Otherwise, we could risk entering a downward spiral where lack of houses impacts household projections, and these projections then further limit housebuilding – actively perpetuating the housing crisis.