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Census 2011 highlights hopelessly inadequate housing supply and affordability crisis

Tuesday 10th September 2013

The first analysis of the Census 2011 and its impact on household formation has been published today by leading housing and planning charity, the Town and Country Planning Association (TCPA) and shows that the scale of housing need and demand continues to significantly outstrip supply.

The report, New estimates of housing demand and need in England, 2011 to 2031’, by the renowned housing academic, Alan Holmans, from the Cambridge Centre for Housing and Planning Research at Cambridge University, shows that housing requirements are on average around 240,000 – 245,000 per year, with around 60% of all demand and need in the four southern regions. This is up to 10,000 more homes per year than the generally used 235,000 figure; while house-building levels are slowing rising from their lowest levels since the 1920s, at around 100,000 per year.

Kate Henderson, TCPA Chief Executive said:

“This research – the first of its kind to analyse the Census 2011 data – is a crucial reminder of the desperate need for more and better housing in the right places. We have a hopelessly inadequate supply of housing and a serious backlog, as well as chronic affordability problems.

While house-building levels remain at about 100,000 per year, the Census reveals a staggering need for over 240,000 homes per year.  The research also shows that nearly one third of newly arising housing need requires some subsidy; without this investment affordability, overcrowding and ultimately homelessness will worsen.

 We urgently need a new vision for housing and the development of new communities. That new vision has to ensure a substantial increase in the supply of new homes and address affordability. At the same time, we must focus on building successful new communities, whether as part of urban regeneration or through new Garden Cities. This is essential not just to our economic future but also the social and environmental wellbeing of our country.

The figures make projections for 2021 and extend them to 2031 to enable longer term decisions for land use management, planning and local government. A selection of headline findings from the report are set out below:

 1. National demand and need

The analysis presented in this paper suggests that, even if the economy remains depressed and household formation rates remain low, there will still be almost a 20% increase in the number of households over the 20-year period to 2031. This is mainly because of the expected continued growth in population. The projections in the report, together with adjustments for gains, losses and vacancies in stock, suggest that over 240,000 additional homes will be required to meet newly arising demand and need.

 2. Type of household demand and need

There was an abrupt break with longer term trends in household formation in England between 2001 and 2011. To take the most obvious example, the number of one-person households in 2011 according to the Census was nearly one million lower than the 2008-based projections published by DCLG in 2011.

Other large-scale shifts in the mix of household types include far more couple-plus-other-adult households than expected. In part this is about younger people staying at home or sharing accommodation for longer. But that is not the whole story as changes are observed in all age groups.

3. Tenure of housing demand and need

Applying past trends based mainly on household composition would suggest that some 68% of new households would be in the market sector (owner occupation or private market renting without benefits), but that housing to meet nearly one third of newly arising need would require some subsidy.

4. Regional variations in housing demand and need

At the regional level, not far short of a quarter of all housing demand and need is likely to be concentrated in London, with over 60% in the four southern regions. But all regions require significant additional housing investment.

Professor Christine Whitehead, who was involved in the research that lies behind the report, said:

“It is enormously important that we plan for recovery and deliver much higher output levels. Otherwise if recovery happens increasing house prices will worsen affordability. Planning based on the past few years of recession will simply build in the next crisis.”

Chris Tinker, Board Director at Crest Nicholson, who supported the research, said:

“This study re affirms the on-going need for over 240,000 new homes per annum, 60% of which is required in London and the four main Southern regions. With developer’s consented land banks amounting to less than two year’s housing demand there is therefore an urgent need for Local Authorities and developers to work together, especially in key demand areas, to identify and plan for a significant increase in new communities within which well-designed homes can be delivered. A failure to meet housing demand will continue to undermine affordability and put the future prosperity and success of our communities at risk.”

‘New estimates of housing demand and need in England, 2011 to 2031’ is published as part of the TCPA Tomorrow Series and will be launched by Lord Richard Best in the House of Lords on Tuesday 10th September. The Association is grateful to the Lady Margaret Paterson Osborn Trust and Crest Nicholson for their support for the publication of this paper and to Professor Christine Whitehead, LSE, for her editorial contribution to the paper.

 The TCPA will be discussing the findings of this research at fringe events entitled ‘What Homes Where?’ at this year’s three major political party conferences.

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