Estimating future household formation Monday 16th December 2013

Estimating future household formation Monday 16th December 2013

Estimating future household formation Monday 16th December 2013 London School of Economics Long term trend in household size Census 2011 found more people but fewer households than expected. No fall in household size, despite ageing population

What were the changes? A new trend or a blip? Source: Christine Whitehead, LSE and CCHPR, October 2013 2 2 Differences between Trend Projection and Actual Change 2001 2011 Couples with one or more other adults Other multi-persons households

+583,000 One-person households -988,000 Total difference (excluding impact of higher population) - 74,000 +331,000 Source: Christine Whitehead, LSE and CCHPR, October 2013, who noted that all ages are involved in these changes. 3 Candidate causes of changed household

formation Age structure? eg. Elderly: smaller households; men living longer; care in the community. Immigration? Recent immigrants form fewer households during their first years; Housing market, personal income? lack of affordability deters entrants to housing market Educational finance Delays leaving home Benefits changes? Cap deters large households Bedroom tax encourages large households Temporary (5 years) or structural (twenty years)

Projections of households of each type = population projections x household formation rates projected for each household type Scotland and England Future households of type t = sum over all ages (sex, marital status, couple status): Future household population by age x Future household representative rate for type t Wales and Northern Ireland Future households of type t = [sum over all ages: Future household population by age x Future household membership rate for type t] / average household size of type t The political economy of household projections House-building requires permission Permission involves regulation of land release

Land release is argued through a balance of social/environmental factors and housing need Housing need is estimated from projections of households Newly arising demand and need for housing in England, 2011-31 (thousands) (Whitehead) Total Net increase in households Second homes* Vacant dwellings* Households sharing dwellings Concealed families Net increase in dwellings Annual average +4,491

+240 +135 +/-? +/-? 4,866 243 Household projection Relatively minor allowances? Housing land needed Source: Adapted from Christine Whitehead, LSE and CCHPR, October 2013 7 Comments Allocation of housing land allocation affects all services

Needs of the population in new housing National need for housing => decisions over where the land is made available Major players: local residents, housing developers Household formation estimates reflect effective housing demand Should household projections reflect need or demand for housing? How should projectionists advise their projections are used? Revision after census has been too great, though foreseen How to reduce it in future?

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