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How do we get to 250,000 homes a year? Neil McDonald Visiting Fellow at Cambridge Centre for Housing and Planning Research Author of “What Homes Where?”
How do we get to 250,000 homes a
year?
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
plus:
those who arrive
less:
those who go
Population growth
Number of people in 10 years time will be:
the number now
plus:
those who arrive: births and arrivals from abroad
less:
those who go
Population growth
Number of people in 10 years time will be:
the number now
plus:
those who arrive: births and arrivals from abroad
less:
those who go: deaths and those who go abroad
Population growth
-600
-400
-200
0
200
400
600
800
Births Deaths Migration in Migration out
Tho
usa
nd
s o
f p
eop
le
Source: averages for 2011-21 from ONS 2011-based projections
Causes of population growth 54m population
Population growth
-600
-400
-200
0
200
400
600
800
Births Deaths Migration in Migration out
Tho
usa
nd
s o
f p
eop
le
Source: averages for 2011-21 from ONS 2011-based projections
Causes of population growth 54m population
Births 730k
Population growth
-600
-400
-200
0
200
400
600
800
Births Deaths Migration in Migration out
Tho
usa
nd
s o
f p
eop
le
Source: averages for 2011-21 from ONS 2011-based projections
Causes of population growth 54m population
Births 730k
Deaths -460k
Population growth
-600
-400
-200
0
200
400
600
800
Births Deaths Migration in Migration out
Tho
usa
nd
s o
f p
eop
le
Source: averages for 2011-21 from ONS 2011-based projections
Causes of population growth 54m population
Births 730k
Deaths -460k
280k 280k
Population growth
-600
-400
-200
0
200
400
600
800
Births Deaths Migration in Migration out
Tho
usa
nd
s o
f p
eop
le
Source: averages for 2011-21 from ONS 2011-based projections
Causes of population growth 54m population
Births 730k
Deaths -460k
280k 280k
Migration in 690k
Population growth
-600
-400
-200
0
200
400
600
800
Births Deaths Migration in Migration out
Tho
usa
nd
s o
f p
eop
le
Source: averages for 2011-21 from ONS 2011-based projections
Causes of population growth 54m population
Births 730k
Deaths -460k
280k 280k
Migration in 690k
Migration out -510k
Population growth
-600
-400
-200
0
200
400
600
800
Births Deaths Migration in Migration out
Tho
usa
nd
s o
f p
eop
le
Source: averages for 2011-21 from ONS 2011-based projections
Causes of population growth 54m population
Births 730k
Deaths -460k
280k 280k
Migration in 690k
Migration out -510k
180k 180k
Population growth
-600
-400
-200
0
200
400
600
800
Births Deaths Migration in Migration out
Tho
usa
nd
s o
f p
eop
le
Source: averages for 2011-21 from ONS 2011-based projections
Causes of population growth 54m population
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?
0
1
2
3
4
5
19
11
19
21
19
31
19
41
19
51
19
61
19
71
19
81
19
91
20
01
20
11
Ave
rage
ho
use
ho
ld s
ize:
En
glan
d a
nd
W
ales
Source: ONS
Household size People have been living in smaller and smaller households for at least 100 years…..
How many homes do 460,000 people need?
0
1
2
3
4
5
19
11
19
21
19
31
19
41
19
51
19
61
19
71
19
81
19
91
20
01
20
11
Ave
rage
ho
use
ho
ld s
ize:
En
glan
d a
nd
W
ales
Source: ONS
Household size People have been living in smaller and smaller households for at least 100 years…..
……until the last census when the average size hardly changed
How many homes do 460,000 people need?
0
1
2
3
4
5
19
11
19
21
19
31
19
41
19
51
19
61
19
71
19
81
19
91
20
01
20
11
Ave
rage
ho
use
ho
ld s
ize:
En
glan
d a
nd
W
ales
Source: ONS
Household size People have been living in smaller and smaller households for at least 100 years…..
……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
380
400
420
440
460
480
500
Ho
use
ho
lds
per
10
00
in a
ge g
rou
p
Source: DCLG
Households formed 25-34 year olds
2008 projections 2011 2011 projections
Household growth: what changed?
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
380
400
420
440
460
480
500
Ho
use
ho
lds
per
10
00
in a
ge g
rou
p
Source: DCLG
Households formed 25-34 year olds
2008 projections 2011 2011 projections
Household growth: what changed?
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
380
400
420
440
460
480
500
Ho
use
ho
lds
per
10
00
in a
ge g
rou
p
Source: DCLG
Households formed 25-34 year olds
2008 projections 2011 2011 projections
Household growth: what changed?
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
Household growth: what changed?
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
380
400
420
440
460
480
500
Ho
use
ho
lds
per
10
00
in a
ge g
rou
p
Source: DCLG
Households formed 25-34 year olds
2008 projections 2011 2011 projections
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
urban
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
value
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”.
