Summary
Standard housing need methodology needs rewriting following release of new household projections
The standard housing need methodology, a cornerstone of the Housing White Paper, needs a re-write following publication of the new household projections on 20th September.
It has brought starkly into the spotlight that relying too much on household projections to assess housing need is inappropriate.
Local Planning Authorities, housebuilders, land promoters and developers are in limbo until the Government concludes its promised consultation on how to change the methodology.
The standard methodology has always had three flaws: the overall number is too low; the need is not sufficiently focused on the most unaffordable regions; and there are some very unaffordable areas with very low housing need due to suppressed household formation.
With the new household projections, the standard methodology generates a geographic distribution of housing need that does not respond adequately to the challenge to improve housing affordability.
Our recommended approach, first published in October 2017, is more resilient to changes in the household projection methodology. It reduces the impact of suppressed household formation and results in a housing need for England of 290,000 homes per annum, within 3% of the Government’s housebuilding target. The distribution of housing need also responds to the challenge to improve housing affordability.