There has been a lot of debate surrounding the ONS’ latest Household Projections with many arguing that the revision of household projections should mean a revision in the Government’s housing target.
The ONS now projects that 159,000 households will be formed each year, down from the previous 210,000 projected by the Ministry for Housing, Communities and Local Government in 2014.
The ONS’ figures also assume a life expectancy of 85.0 but life expectancy in England has stalled at 81.3 which would lower the household projections even further.
There have been significant misunderstandings as to the role of ONS’ projections by those on both sides of the argument. For clarity, the ONS’ work seeks to show how many additional households would form if the population of England kept growing as it did between 2011-2016 and keeps forming households as it did between 2001-2011.
Their projections do not attempt to predict the impact of future government policies, changing economic circumstances or other factors that may influence household growth, such as the number of houses built. Household projections are not a forecast of how many houses should be built in the future.
Why are the numbers significantly lower?
There are significant changes to the methodology used this year compared to previous ones. Since the ONS has taken over responsibility from the Ministry for Housing, Communities and Local Government, they have used short-run trends dating back to 2001 to create their household projection rates. Before that, the projections were based on long-run trends going back to 1971.
The last seventeen years have been incredibly turbulent. During that time there has been a financial market crash, where housebuilding fell to its lowest ever levels and, in turn, has led to affordability problems and an increasing number of adults living at home.
Adolescents are living alone less, staying at home longer, and – where they are moving out – they are living with others more. We argue that if constraints were removed, that is to say prices that more homes were built and with more affordable housing delivered then the number of first-time buyers would increase, and household formation would revert to 1990s levels.
In short, ONS are now projecting forward trends that Government policy is explicitly seeking to reverse, raising questions as to whether they are fit for purpose in planning for housing need.
How can TFA help?
TFA are well aware of how critics of development at a local and national level may use this data to bolster their arguments. It is a factor in communicating the need for housing which clearly is dependent on a whole range of factors. Currently we are communicating issues of housing need both to Government for a range of clients but also locally through the plan making process.
