How do we get to 250,000 homes a year? PDFs... · How do we get to 250,000 homes a year? Neil...

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How do we get to 250,000 homes a

Neil McDonald

Visiting Fellow at Cambridge Centre for Housing

and Planning Research

Author of “What Homes Where?”

We need 250,000 homes a year

We can deliver 250,000 homes a year if there is the political will to do so.

But, do those who need to take action believe:

that 250,000 p.a. are really needed

there will be serious consequences of not delivering that number

it can be done…..

……without despoiling our ‘green and pleasant land’?

Why we need 250,000 homes a year?

There are going to be that number of additional households needing

homes because:

our population is growing

we are living in smaller households

Population growth

Number of people in 10 years time will be:

the number now

those who arrive

those who go

Population growth

the number now

those who arrive: births and arrivals from abroad

those who go

Population growth

the number now

those who arrive: births and arrivals from abroad

those who go: deaths and those who go abroad

Population growth

Births Deaths Migration in Migration out

Source: averages for 2011-21 from ONS 2011-based projections

Causes of population growth 54m population

Population growth

Births 730k

Population growth

Births 730k

Deaths -460k

Population growth

Births 730k

Deaths -460k

280k 280k

Population growth

Births 730k

Deaths -460k

280k 280k

Migration in 690k

Population growth

Births 730k

Deaths -460k

280k 280k

Migration in 690k

Migration out -510k

Population growth

Births 730k

Deaths -460k

280k 280k

Migration in 690k

Migration out -510k

180k 180k

Population growth

Births 730k

Deaths -460k

280k 280k

Migration in 690k

Migration out -510k

180k 180k

Growth 460k

Can we trust the numbers?

Births:

– fertility rates well understood

– those who will form households in the next 20 years have already been born

Deaths:

– uncertainty small

– ONS has a tendency to underestimate improvements in mortality rates

International migration: more uncertainty but:

– Government has limited room for manoeuvre

– reducing net migration by 60,000 (a third) only reduces housing numbers by around 30,000

How many homes do we need?

We should plan to house an extra 460,000

people a year

How many homes do 460,000 people need?

Source: ONS

Household size People have been living in smaller and smaller households for at least 100 years…..

Source: ONS

……until the last census when the average size hardly changed

Source: ONS

……until the last census when the average size hardly changed

What changed?

Household growth: what changed?

Not much change in

most age groups

Big impact on 25-34

year olds:

Expected: 473

households per 1000

Source: DCLG

Households formed 25-34 year olds

2008 projections 2011 2011 projections

Not much change in

most age groups

Big impact on 25-34

year olds:

Expected: 473

households per 1000

Actual: 436 per 1000

Difference > ¼ m

households

Source: DCLG

Not much change in

most age groups

Big impact on 25-34

year olds:

Expected: 473

households per 1000

Actual: 436 per 1000

Difference > ¼ m

households

Deterioration projected

Source: DCLG

Increase in young adults living with parents: ~ ½ million between 2001

and 2011

Young adults spending longer in shared accommodation

35-44 year olds also affected

Much smaller impacts on older age groups – largely cancel out

Impact is on those with lower incomes and without parental support:

People setting up home on their own later

Putting off having families

Delaying moving up to larger home when children arrive

How many homes do we need?

Latest official projections

say 221,000 extra

households a year, but:

Assumes further

deterioration for

younger adults

If 221,000 aren’t

delivered, things will

get even worse

Source: DCLG

What does this mean for housing markets?

Large suppressed demand: if 25-44 year olds were able to set up

households at the rate previously expected around 300,000 homes year

would be needed.

People wanting houses they can’t afford doesn’t build houses

‘Effective demand’ depends on more and more accessible mortgage

funding

If ‘effective demand’ increases without increased supply we’re back to

‘boom and bust’

Increasing supply: can the industry build 250,000?

We have built more

than 250,000 a year

before

It will take time to build

capacity

Increasing supply: impact on countryside

Only 11% of England is

Could build 250,000 homes

a year for next 25 years and

still build on less than 1% of

what is left

Plenty of greenfield sites

that have little or no amenity

Increasing supply: providing the land

The Government has a ‘cunning plan’:

Do away with regional plans that enabled us to:

decide how many homes are needed on cross-boundary basis

decide where best to put them

Tell councils they must assess their own housing needs

Put in place a “Duty to co-operate” on LAs to deal with cross-border

issues

Increasing supply: providing the land

The ‘cunning plan’ might work if:

Planning inspectors insist on genuinely objective assessments of needs:

Initial signs encouraging

Ministers need to back inspectors

“Duty to co-operate” is given teeth:

Duty to talk is useless

What happens if councils won’t agree?

Conclusions

More births than deaths and a realistic view of migration mean we need

250,000 new homes a year

Even that means that conditions continue to deteriorate for younger

adults: 250,000 must be a minimum we plan to exceed

Large suppressed demand – which could lead to a return of ‘boom and

bust’ if access to mortgages improves without increased supply

We can build the homes we need with only small greenfield land take

Crucial that the planning system delivers the land needed. The ‘cunning

plan’ could work if Ministers back inspectors and sort the “Duty to Co-operate”.

How do we get to 250,000 homes a year? PDFs... · How do we get to 250,000 homes a year? Neil...

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