Household Projections and
Development Planning
(mis)Usage and
(mis)Interpretation?
Greg Ball
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
Projections and Planning
• Planners mainly interested in change over
time rather than future stock
– More demanding in terms of accuracy as errors greater
in percentage terms
• Main use is to identify land for future
housing development
• Projections “inform” debate over number
of dwellings to be provided
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
25
Projected
household stock
2021 (England)
Only 66,000 of growth
due to household
representative rate
change (0.3% of 2021
stock)
2011 Census
confidence interval
around household
stock +/-0.16%
Households(millions)
20
Projected household
stock in 2021 is 24.3
million; 2.2 million
higher than in 2011.
2011-2021
household
rate
changes
15
2011-21
effect of
population
change
2011
households
10
5
0
Households in 2021
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
Representative Rates
•
•
2011-based household rate
change much less than CLG’s
“2008-based”
Apply rates to same
population projection*
Household Change
in England 2011-21
3,000
– 2011-based rates produce
356,000 fewer additional
households
Population main driver but
issue of future rate changes
remains important for
development planning
Thousands
•
2,500
2,000
1,500
1,000
500
*Population projection is CLG’s 2008-based
Source: Table 6 CLG Statistical Release, 9 April 2013
0
2008 rates 2011 rates
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
Status of Projections
• Trend-based projections
• Not forecasts - do not predict impact of
– future government policies,
– changing economic circumstances
– or other factors on demographic behaviour.
• Provide household levels and structures
that would result if assumptions based on
previous demographic trends in the
population and rates of household
formation were to be realised in practice.
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
Projections and Development
Planning
• Projections are
– driven by technical judgements
– afflicted by data availability and quality issues
– subject to natural uncertainty and frequent revision
• Local housing development policy
– Governed by time consuming procedural hurdles
– Unresponsive to change
– Identifies development land but implementation largely
driven by other agents
– Delayed impact on actual development on ground
• Fundamental mismatch between transient projections
and an inflexible legalistic planning system that seeks
to fix the future
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
Procedures and interests
• Development plans constrained by legislation and
government policy and ‘guidance’
– National planning procedures (eg NPPF)
– Expressed in a statutory document (Core Strategy)
•
•
•
•
Local political approval
Consultation and formal objection
Examination in public before a Government Inspector
Growing role of the Courts
• Subject to a range of conflicting interests
– Local politicians and lobby groups
– Government polices
– Powerful development and landowning interests
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
Government Guidance
• National Planning Policy Framework
– the Strategic Housing Market Assessment
[SHMA] should identify housing need which
meets household and population projections
• National Planning Portal (test site)
– The 2011-based Interim Household Projections
only cover a ten year period up to 2021, so
plan makers would need to assess likely trends
after 2021 to align with their development plan
periods.
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
2011 projections
A planning consultant’s view
• ... project forward what has happened in the
past five years, a period characterised by
– undersupply of new homes,
– asking prices out of the reach of first-time buyers
and
– restricted mortgage finance.
• projections could be rendered meaningless
when the market recovers, due to the
unlocking of suppressed demand.
• (Philip Barnes, Newcastle office leader at consultancy
Nathaniel Lichfield and Partners) Extract Planning
19.4.2013. (Italics are mine)
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
And another..
• Projections replicate the past five years, during which the
25-34 age group has been most keenly affected by
– a lack of mortgage availability and
– low levels of housebuilding.
• projections should be given little weight
– interim,
– contain projections for only 10 years
– based on earlier trends underpinned by very low levels of house
building.
• local authorities that use the projections to justify
reductions in housing targets risk exacerbating problem of
pent-up housing demand.
• "The past five years have been exceptional. Is it right that
they should continue?"
•
(Simon Macklen, director of research at Barton Willmore) quoted in Planning
19.4.2013
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
A Planning Inspector’s
Judgement
•
•
•
•
•
unwise to rely on household growth rates shown in the 2011based projections persisting beyond 2021
household formation, especially among the 25-44 age-groups, has
been suppressed in the years since the global financial crisis of 2008
by reduced supply and lower effective demand.
..evidence from 2011 Census, which simultaneously demonstrated
that there is a higher population and a lower number of households
than had been expected from previous projections.
Town and Country Planning Association paper* argues persuasively
that just under half that reduction is attributable to suppressed
household formation due to the state of the economy and the housing
market.
.... under the more favourable economic conditions expected in
future years, there will almost certainly be a return to higher
rates of household formation.
* Alan Holmans, New estimates of housing demand and need in England, 2011 to
2031, Town and Country Planning Tomorrow Series Paper 16, September 2013
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
And his recommendation
• Councils to undertake further analysis to derive an
objective assessment of housing need over the Plan period:
– “using the latest available official population projections,
combined with NLP’s “index” approach to translate those
projections into future household numbers. The “index”
approach uses
• HRR drawn from the 2011-based household
projections for the period 2011-2021, and
• an index of HRR drawn from the 2008-based
household projections for the rest of the Plan period.
“
(STAGE 1 OF THE EXAMINATION OF THE SOUTH WORCESTERSHIRE
DEVELOPMENT PLAN INSPECTOR’S INTERIM CONCLUSIONS, para 44)
http://www.swdevelopmentplan.org/?page_id=5393
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
Characteristics of debate
• Technical arguments mask underlying interests
• Value loaded and ill-defined terms such as
suppressed demand & need
– E.g. If previous projections of growth have not occurred
does this mean that
• Demand or need is not being met
• Or previous projections were off-target?
• Previous household projections were not
challenged but 2011 are. Is this because
– Trend-based method is fundamentally flawed or
– Results are an inconvenient truth for powerful prodevelopment interests?
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
Issues for planners
• How reliable are projections in technical terms?
– Less reliable locally than nationally
– Need indicators of sensitivity
• Projections perpetuate the past into the future
• Projections offer no explanation of
– Drivers of past trends
– Impacts of past trends, e.g. on living conditions,
migration etc.
• Projections dominate discussion at Examination
to detriment of other considerations?
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk
A final statistic
• Difference of 356,000 additional households over 10
years between 2008 and 2011 based rates
• Average price of new house is £228,000 (ONS House
price Index September 2013)
• About £0.8 billion at stake
– Massive potential gains for landowners and developers
– Stamp duty, legal fees, household furnishings
– Housing’s role in Government economic strategy
• Clear economic case for CLG to support research into
household change
– Urgent need for 2012 CLG projections to run beyond 2021
– Impacts of liberal and restrictive development policies
BSPS meeting 16 December 2013:
Gregball@orangehome.co.uk