New ONS household projections and housing need

Recent ONS figures and housing need

Recent figures from the Office for National Statistics (ONS) show reductions in household formation for lots of councils (LINK). Nationally they suggest a need for 159,000 additional households per year. This is in contrast to The Ministry for Housing and Local Government (MCHLG) projections of 210,000 houses and the government’s headline housing goal of 300,000 new homes a year by the mid-2020s.

It would seem that commentators are getting over excited by this perceived drop and are suggesting that the government’s housing target may be too high.

BUT – it is worth considering:

The time frame of the stats (2001-11): they cover a period when housebuilding was at its lowest level in modern history. This ‘bakes in’ the problem. It’s a bit like cutting bus services, then reviewing number of people using buses and finding that less people are taking the bus, then using that as justification to cut more bus services.

This does not mean the stats are wrong, but that they are not targets: The ONS specifically acknowledges this: “Household projections are not forecasts. They do not attempt to predict the impact of future government or local policies, changing economic circumstances or other factors that may influence household growth, such as the number of houses built. Household projections are not a prediction or forecast of how many houses should be built in the future.

The upcoming consultation on assessing housing need: The government were already aware that this may happen and will be consulting on changes on forecasting housing need to ensure they hit the government’s target of 300,000 homes a year by mid 2020s. This consultation will happen very shortly, with Kit Malthouse recently confirming it will be before Christmas.

How many houses do we need?

A recently published paper by the House of Commons gives some insight into where the new method is likely to be heading:

“The household projections are a starting point. But decisions about how much housing should be built end up taking in broader considerations – like how well new supply can tackle affordability issues, how best to help households in unsuitable and overcrowded conditions, and expected additional demand for second homes and more space.”

So, in conclusion, it would seem that nothing has changed the government’s goal of building many more homes.

In the meantime, the MHCLG consultation on changes to planning policy and guidance including the standard method for assessing local housing need will commence on the 26th October 2018 and will close at 11.45pm on 7 December.

This consultation will also propose clarifications of national planning policy on:

  • housing land supply
  • the definition of deliverable
  • appropriate assessment

The team at Plainview Planning will be preparing and submitting representations for this consultation on behalf of all our developer clients.

IMAGE SOURCE: House of Commons Library 2018