Updating Household Projections for England

Bob Garland

Why project households?

• Can’t just rely on population projections for long term planning for housing

• Need some systematic view of future housing requirements that is consistent from each local authority upwards to England

• A common starting point for local authority assessments

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How are Household Projections Used?

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National Planning Policy Framework (NPPF)

Local Authority Strategic Housing Market Assessments

Scale and mix of housing needed over plan period

Meets household projections

Addresses the need for all types of housing for different groups

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Main Use of the Projections in England

Planning Practice Guidance

• Household Projections the starting point estimates

• Adjustments may be needed due to:

• Suppression of household formation

• More recent demographic evidence

• Employment trends

• Market Signals (e.g. house prices, rents, affordability)

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Household Projections - Magnitude

• Household Growth in England

• 2011 Interim projections • 221,000 households per year up to 2021

• 2008-based projection• 245,000 household per year over the same period

Housing Supply (Net additional dwellings)

• 2013/14 136,600• 2007/08 223,500

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Updating Household Projections: Challenges

• Changing population projections• - Implications for household projections

• What we learnt from the 2011 Census?

• What we learnt from the 2011-based household projections?

• What have we learnt about the methodology?

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Changing Population Projections

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Changing Population Projections

• ONS 2012 based population projections

• England population projected to grow from 53.5 million in 2012 to 62.2 million in 73.3 million in 2037

• • Lower rate of growth than 2010 –based (mainly lower migration

assumption)

• Key aspects for household growth:

• Ageing Population: average age 39.7 years in 2012 42.8 in 2037 (UK)

• Number of people aged 80 to more than double to 6 million by mid-2037.

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National Population Projections (ONS): Ageing Population

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ONS 2012 Based Sub National Population Projections

The ONS SNPP are the starting point for the household projections

Population growth for each local authority in England

Large variation across local authoritiesEngland Population to grow by 7% up to 2022¼ of LAs to increase by over 9.5%¼ of LAS by less than 3.9%

Variation in Age Structure2012: 24 LAs with more than ¼ people aged 65 and over2022 83!

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Projected population growth rate by local authority, England, mid-2012 to mid-2022

ONS SNPP 2012-based

What we learnt for the Census 2011

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What we learnt from the 2011 Census

• More people and less households than projected

• Alan Holmans: ‘ New Estimates of Housing Demand and Need in England, 2011 to 2031’

• Town and Country Planning Asociation, (2013)

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Comparison of Census 2011 Estimate and Projections

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Comparison Projections and Census

England Thousands

Projection Census 2011 Difference %

Population 52665 53107 442 1%

Households 22389 22102 -287 -1%

One person households 7773 6785 -988 -13%

Lone parent households 1811 1712 -99 -5%

Couples, no other adults 9579 9465 -114 -1%

Couples, one or more other adults 1925 2508 583 30%

Other multiple persons 1301 1632 331 25%

Alan Holmans, New Estimates of Housing Demand and Need in England, 2011 to 2031(TCPA, 2013)

Differences between Census

England

Differences between projections and Census

Household thousands

One Person CouplesOther multi-person

Households Representvie's age

16-24 -48 15 16

25-34 -204 -13 35

35-44 -187 94 27

45-54 -180 182 56

55-64 -130 151 57

65-74 -104 24 55

75-84 -88 19 64

85 and over -48 1 22

Total -988 469 331

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Alan Holmans, New Estimates of Housing Demand and Need in England, 2011 to 2031(TCPA, 2013)

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(2) Households – 2011 Census – Household numbers & changes at national level

• There were 22.1 million households in England on census night compared to 20.5 million in 2001, an increase of 7.8 per cent.

Number of Households and Intercensal Increase, 1911-2011 for England and Wales

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011

0

5

10

15

20

Number of Households

Percentage Increase

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Census – Household average sizes at national level

•The average household size was 2.4 people per household in 2011, unchanged from 2001 levels. The average household has decreased substantially in the last 100 years as the number of households increased faster than the household population – the average household had 4.3 residents in 1911!!

Household and Population Increase & Average Household Size, 1911-2011, for England & Wales

0.0

5.0

10.0

15.0

20.0

1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011

Year

Perc

enta

ge

Incr

ease

from

pr

evio

us C

ensu

s

0.0

1.0

2.0

3.0

4.0

5.0

Num

ber o

f re

side

nts

per

hous

ehol

d

Householdpopulation -PercentageIncreaseHouseholds -PercentageIncrease

AverageHouseholdSize

What has happened since the Census?

• Mortgage approvals to first time buyers are recovering – not yet reached previous peak

• English Housing Survey 2012/13 (Gross Household Formation)386,000 new households, they were most likely to enter the private 64% into private rent19% became owner occupiers,17% into social rented

Most new households aged under 35: 45% had an HRP aged under 25, and 41% were aged 25-34.

35 % one person 30 % couples with no dependent children

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What we learnt for the 2011-based household projections?i

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Lower Household Growth in 2011 based interim projections

thousands

2011-based projection 2008-based projection

Difference *Average annual change 2011 –

2021 Average annual change 2011 – 2021Under 25

-2 -6 3.225 – 34

23 49 -26.335 – 44

15 22 -7.545 – 54

17 11 6.655 – 64

50 47 3.165 – 74

46 48 -2.575 – 84

40 41 -1.485 +

32 33 -0.2All households

221 245 -24.9

Differences in percentage points need to be interpreted as indicative only because of the change in population base

2.15

2.20

2.25

2.30

2.35

2.40

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Ave

rage

Hou

seho

ld S

ize

2008-based

2011-based

Average household size – 2008 and 2011 interim projections

Changes in the Drivers of Household growth

2011 Projections: population change the main driver of the increase in households, accounting for 98 per cent of the total increase in households between 2011 and 2021.

2008 Projections : Population: 72% Household Formation: 16%

2011 Projections Components of ChangeComponents of household growth, England

Population level

Household formation

Interaction terms

Percentage 0.98 0.03 -0.01

Household Numbers (thousands) 2,161 66 -22

Annual Average contribution (thousands) 216 7 -2

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Some questions about the methodology

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Too complicated?

What’s the value of Stage 1 and Stage 2?

Stage 1 tied to an ‘old’ definition of household rep. oldest male then the oldest female if there is no male?

Done to provide consistent back to 1971?

A method that ‘learns’ from recent trends

England Household Projection Methodology

Stage 1 : Headline Household Numbers

• Household Representative Rates by Age, Gender and Marital StatusProject based on trends from past Census data back to 1971

• Apply HRR to population projection• National down to Local Authority

Stage 2: Detailed Household Groups• Project on 2001 and 2011 Census

• Controlled to Stage 1 totals• Headship Rates by Detailed Household Types

• One person /families (children)/ Family+ other adults

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What is the future for household projections

• Much greater reliance on administrative data?

• End of the long term decrease in average household size?

• What about the elderly - assisted living?

• Should we take account of the housing market – at least for projections over the next 10 years?

• Could population and household projections be integrated?

• Now your questions and suggestions . Thank you.

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