Government experts predict further slowdown in household growth rates

The number of households in England is predicted to rise at an average rate of 149,960 per year over the next 25 years, a lower rate of growth than previously expected, according to latest government projections.

Population: latest projections for England forecast lower household growth than previously predicted (Pic: James Cridland, Flickr)
Population: latest projections for England forecast lower household growth than previously predicted (Pic: James Cridland, Flickr)

According to the Office for National Statistics (ONS), which this week published its 2018-based household projections for England, the number of households is expected to increase by 16.2 per cent to 27 million in 2043.

The last household projections were based on data from 2016 and predicted 17.3 per cent growth in the number of English households over a period of 25 years to 2041.

Both sets of projections represent a significant fall in the level of household growth predicted by the ONS’s 2014-based figures, which suggested 23.1 per cent growth by 2039.

Local authorities in England are expected to use the 2014-based household projections to calculate their level of annual housing need, according to the National Planning Policy Framework (NPPF) and associated Planning Practice Guidance (PPG).

The government has said its standard methodology for assessing housing need, introduced by the NPPF in 2018, is under review but details of any changes are yet to be published.

Analysis by consultants Barton Willmore suggests that the latest household projections, if used to inform calculations of housing need under the standard methodology, would result in a 56,443-home reduction in the level of need across England compared to the 2014-based projections. 

Their analysis also reveals significant differences between regions. London would see a large reduction in its level of housing need, whereas the Midlands, the North East and the North West would all see their annual housing requirement increase if informed by the new 2018-based figures.

Dan Usher, development economics associate at Barton Willmore, said in a LinkedIn post: “The 2018-based household projections published today do not affect the calculation of the NPPF’s standard method until any change in the NPPF and PPG is published. 

“Notwithstanding this, and given their overall projection nationally, they would only serve to negatively impact the government’s aspiration to supply 300,000 new homes every year by the mid 2020s under the existing standard method.”

Dominick Veasey, director at Nexus Planning, also writing on LinkedIn, suggested that the government would no longer be able to rely on the ONS household projections to support its standard methodology or its stated target of building 300,000 homes a year.

“The standard methodology as a basis for determining future housing figures is becoming increasingly untenable," Veasey warned.

He added: “The 2018-based projections broadly follow the 2016-based projections that the ministry swept under the carpet as they didn’t align with the 300,000 per annum figure. Surely it cannot do the same again?” 

The ONS projections also highlight demographic changes taking place across England. According to the latest update, much of the projected growth in the number of households is accounted for by older people living alone.

The number of people aged 75 years and over living on their own is projected to increase by 461,000 in the ten years to 2028.

Andrew Nash, head of population projections at the ONS, said: “We project the majority of household growth over the next ten years will be because of an increase in older households without dependent children, particularly those where the household reference person is aged 75 years and over. This shows the potential impact of an ageing population on future household formation.”

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