Resources

How developers should react to the ONS household projections bombshell

Central Manc

On 20 September, the Office for National Statistics (ONS) threw a hand-grenade into the housing debate. Overnight, we went from a dire housing shortage to the happy news that the UK is building even more homes than we need.

Their Household projections in England report suggests that we need only a little more than 200,000 additional dwellings each year. That’s far short of the numbers local authority targets are currently based on.

For councils preparing local plans the effect is huge. Greater Manchester held off publishing its Spatial Framework (the GMSF) for the ONS figures and the new draft is likely to drop many of the more controversial Green Belt sites thanks to these reduced household numbers.

Across the country, Green Belt campaigners and politicians of all colours are rejoicing.  They have taken the news as proof that they will not need to build nearly so many new homes.

Sanity check

Are we really building more houses than we need? That might come as a surprise to the many people in their 20s and 30s struggling to get on the housing ladder, or having difficulty finding homes to rent.

It will also come as a surprise to the politicians who fought the last election on a promise to build up to 300,000 new homes a year. The ONS figures are being taken to mean the real annual requirement is 210,000, fewer than the 217,000 new dwellings actually added in 2016/17. Some areas – such as Cambridge – are discovering they need build no more homes at all.

What is really happening?

Our advice to both developers and local authorities is don’t make any drastic decisions just yet.

First, the ONS household projections may not mean what you think they mean. Here’s what the ONS itself says about them:

Household projections are not forecasts and generally take no account of policy or development aims that have not yet had an impact on observed trends… Household projections should be thought of as a trend-based starting point for analysis, providing data produced on a consistent basis for England, its regions and local authorities.

The ONS figures say, in effect, that if nothing else changes and current trends continue, here’s how many households we’ll have in the future.

But things are going to change. The ONS explicitly says that its figures do not account for economic growth. So if people in your area are saying “These ONS figures show we don’t need to build more houses,” and also saying “We want to boost our local economy and create more businesses and jobs,” those numbers won’t add up.

Second, it is unclear how the government will convert the ONS household projections into housing targets. The delay between the ONS figures coming out and the government telling us what they mean is unfortunate. Responsibility for the figures moved from the Ministry of Housing, Communities and Local Government to the ONS last year, which may have resulted in balls being dropped.

Will a government pledged to build 300,000 homes annually switch to 210,000 on the basis of one ONS projection? It seems unlikely. And if they don’t, the big drops in housing requirements could just as quickly be reversed.

It’s entirely possible that we will go into the New Year with housing figures back up to previous targets. The wise approach is to wait.

Your Comments

Read our comments policy here

Great article, my understanding is that the new government guidance should be released in the next few weeks and will take the figures back up. Strangely, the to-ing and fro-ing and delays will take the GMSF plan (and numbers) to where it would have been in any event following the originally envisaged GMSF consultation. The repeated delays to the GMSF have only sought to highlight potentially inherent weaknesses in local devolution around making tough but needed decisions for a Greater Manchester.

By steve capper

Wait!?

There were various Local Plans at a point of publication which, if they wait, will possibly time-out

By Merseyside Property Watcher

iain, I find all your articles informative and at a level most can follow. Please keep it up. I like many are fed up with the ongoing debate. In most walks of life you aim high. Aim for a high target of homes and see what happens as nothing ever goes completely to plan. The idea that there has been a large uprising against Green Belt development is just not true. The percentage of greater manchester residents who are opposing such plans is very small indeed…its just that the minority are always the loudest. In many cases it is just jealousy against land owners and not because they understand the purpose or history of the greenbelt. The other fact is that many brown field sites are not where people want to live. If these alledged tree huggers get their way, anyone who can only afford an affordable home or social home will be sat in between industrial units or with methane seeping up as they watch the footy.

By GravyTrain

Merseyside Property Watcher: any local authority that wants to carry on as they are is probably pretty safe. The issue is more those – and there are a lot – seeing this as an excuse to drop their housing numbers. They may be in for a nasty surprise and they should wait for the new year and see what MHCLG come out with.

GravyTrain: That’s an interesting point on Green Belt. Certainly the polling evidence is that people are more in favour of building homes now than they used to be. Whether, as you suggest, the Save the Green Belt groups are a noisy minority, I’m not convinced. Trafford Conservatives, for example. might have been expected to hold on to power if there was really a silent majority happy for building on the Green Belt.

By Iain Roberts

Subscribe to our newsletter