Analysis: New projections wipe out housing need in Oxford and Cambridge under standard method, experts say

Authorities such as Oxford and Cambridge would see their entire housing requirement wiped out if the government's standard method is applied to today's new household projections, experts say.

Oxford: housing need slashed
Oxford: housing need slashed

The new figures would also see England's total housing requirement fall by up to 63,000 homes a year, planning consultants add, falling well short of the government's national target of 300,000 homes per year.

The 2016-based household projections, released this morning, show a 25 per cent fall in the growth rate of households over the next 25 years.

This, according to consultants Planning spoke to today, translates into a drop of between 44,000 and 63,000 in the overall annual housing requirement for England compared with figures from the 2014-based figures. Meanwhile, some authorities have seen their entire housing need wiped out, they say.

The firms produced their figures by applying the government's new standard method, introduced in the revised NPPF, to today's household projections.

The standard method uses household projections as a starting point for calculating the figure and then applies an affordability ratio.

The government has said it wants to deliver 300,000 homes per year in England.

But consultancy Bidwells said their figures pointed to a fall from 273,000 to 213,000 homes per annum across England, while Turley said their statistics showed a fall to 210,000 per annum. Lichfields suggested a new annual figure of 214,000.

According to Bidwells' figures, the latest projections would translate into a dramatic drop in the requirement for many councils, including for Cambridge, whose annual requirement would fall from 578 homes a year to minus eight.

Oxford’s housing requirement decreases by 86 per cent, Preston’s by 91 per cent and Richmondshire’s by 200 per cent, according to the firm’s figures.

Lichfields also finds that the new figures under the standard method suggest "no need for any housing" in Oxford and Cambridge.

Turley’s statistics show that housing need in 21 authorities has more than halved, and that only 33,000 homes are needed across the North, compared with the 53,000 that were actually delivered in the region last year.

Housing need in London is more than a third lower than it would have been under the previous figures, the firm says. Meanwhile, housing need in the South East, South West and East of England is now 15 per cent lower than suggested when the previous 2014-based projections were used, according to Turley.

The government has said it will imminently consult on possible changes to the standard method to account for the likely lower growth rates, confirmed in today's figures.

"This morning’s release shows why the government was right to lose faith in its proposed method," said Andrew Lowe, senior planner at Turley. 

The figures, Lowe said, "will generate further uncertainty for authorities preparing plans and highlights the importance that the government must place in its reconsideration of the standard method calculation".

"Any change to the methodology must address the issues resulting from an unjustified reliance on trend-based projections," he said.

Matthew Spry, senior director at Lichfields, said the lower growth rate "partly flows from the lower population projections released in May", but that "the bigger factor is the change in methodology for household formation, which ONS now bases on short-term trends back to 2001, compared to 1971, as previously".

"The problems are obvious," Spry said. "The new figures ‘bake in’ the adverse consequences of housing under-delivery in that decade, which included a crash in the rate of housebuilding during the great recession and a marked reduction in affordability."

"We should avoid getting too exercised about these new figures until we know what role they might have within a revised standard method."

Simon Elliott, associate at Bidwells, said the implications of the new projections for plan-making was "a bit of a worry", and that it "exacerbated the north-south divide", with the drop for the northern regions being 35 per cent.

But he added that he expected the government to put in place a new methodology quickly. "I’d expect the government to look at this and resolve it pretty quickly, and definitely before the 24th January cut off date for the implementation of the NPPF," he said.

"Hopefully that will get us back to looking at a 300,000 annual housing target across the country."

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