Taking household projections for housing targets is ‘seriously flawed’

New report calls for other evidence and models beyond projections to arrive at a “more appropriate” set of targets.

housebuilding

An “excessive reliance” on household projections as a basis for housing targets is seriously flawed, a new report says.

Released by Crisis and NHF, the report into UK wide housing requirements for low income households and the homeless recognises a current housing need backlog of 4.75m households across Great Britain – with 4m in England alone.

The report presents the findings of a study, carried out by Professor Glen Bramley of Heriot-Watt University for Crisis and the National HHF, to estimate the scale of current and future housing need and associated housing requirements.

Reinforcing the widespread perception that current levels of housing supply are inadequate in both scale and scope, the report wants other evidence and models beyond household projections brought to bear to arrive at a “more appropriate” set of targets.

The findings clearly support government giving a lead and setting targets for housing supply and, within that, for affordable tenures including social.

However, the analysis does back a contention that excessive reliance on household projections as a basis for housing targets is seriously flawed, and other evidence and models need to be brought to bear to arrive at a more appropriate set of targets.

Furthermore, the report says this consideration should be more than “tokenistic” as it is shown that the scale of redirection of effort in terms of housing supply is “really substantial”, both in terms of geography and tenure.

Acknowledging not all needs can be met in the area where they arise, the report makes a case for councils to cooperate and share in the responsibility for securing adequate housing supply.

The report reserves specific analysis for government promotion of home ownership, with the study suggesting that even with large enhancements to supply and resulting improvements, the proportion of ownership would not increase greatly.

As such, the report outlines are alternative policies that could be considered, including tax changes and private rented sector regulation, alongside shared ownership and similar schemes.

Key findings include:

  • A backlog of housing need of 4.75m households across Great Britain – 4m in England
  • Around 3.66m in housing need are currently concealed and overcrowded, those with serious affordability or physical health problems and people living in unsuitable accommodation
  • Around 333,000 households experiencing core and wider homelessness are in housing need.
  • Another 250,000 older households with suitability needs are part of the backlog
  • 510,000 households live in poverty after paying their housing costs.

Over 15 years the research has estimated the total level of new housebuilding required is around 340,000 per year for England, 26,000 per year for Scotland, and 14,000 per year for Wales – 380,000 across Great Britain as a whole.

These figures include new social housebuilding per year of 90,000 for England, 5,500 for Scotland and 4,000 for Wales – 100,000 across Great Britain.

The report acknowledges affordability as a key criterion for adapting housing numerical targets away from numbers inherited from previous plans or from demographic projections.

However, the modelling shows much greater adjustments are needed to achieve a meaningful levelling of affordability differences than those proposed by MHCLG in its 2017 planning guidance.

“If the goal is to make a significant and proportional response to housing need, particularly the most acute needs such as those experiencing core homelessness, quite strongly differentiated housing targets are appropriate,” the report says.

Building on previous research, the report recognises that, to reduce core homelessness substantially, additional measures both within housing policy – such as full application of homelessness prevention measures and housing led responses- and beyond policy  into the likes of limiting or reversing some welfare ‘reforms’ and particularly in relation to the Local Housing Allowance freeze.

The study makes a case for suggested regional targets as consistent with a “reasonable interpretation” of evidence on land capacity.

Other factors which may affect the achievability of these targets depend on levels of subsidy available as well as policies relating to tenure mix, the report says.

It anticipates questions relating to resource requirements, including what proportion of costs can be borne by new developments themselves and the extent of the investment requirement from Government, will be the subject of further analysis over the coming year.

England, the study shows, requires “more ambitious” targets across the board, while Wales would benefit from more investment in affordable housing with its recently enhanced targets “not unreasonable”.

For Scotland the findings are more nuanced, suggesting that care should be exercised about the total housing volume target in view of issues of low demand and housing surplus in some areas.

There, the balance of the affordable supply programme should probably be “shifted somewhat” from social renting to intermediate tenures, the report says.

The analysis highlights the point that not all needs can be met in the area where they arise, and councils need to cooperate and share in the responsibility for securing adequate housing supply.

In the case of London, the report says, needs cannot realistically all be met within the GLA boundaries.

Pitching additional policy considerations the report sets out:

  • Planning for major growth, rather than “ad hoc short term” initiatives – this needs to involve gearing up of capacity and skills in national government and agencies and in councils, particularly those where higher levels of growth are required
  • The role of social rented housing as a strong theme where it is “very clear” from the analysis of affordability based on income distributions that a large number of households cannot afford the private market on any reasonable norms.

While some can afford “intermediate rent”, many households require some form of social rent based on an objective analysis of affordability, the report says.

The report also addresses:

  • Security of tenure as a “ further issue for consideration” alongside any strategy involving significant investment in social rented housing
  • Rent levels, particularly for social rented housing, which the report says have been the subject of contradictory policies since 2010 when rent setting “should be a necessary condition” of any significant investment in social renting
  • The financial feasibility of a much larger social rented programme which “depends significantly” on the interaction between the spatial location of the new housing needed, the effective use of section 106 and the availability and cost of land.
  • The role of intermediate rental housing, which emerges as a significant theme from the study in showing a significant contribution can be made in most areas from such provision alongside social renting

The report reserves specific analysis for government promotion of home ownership, with the study suggesting even with large enhancements to supply and resulting improvements the proportion of ownership would not increase greatly.

As such, the report outlines are alternative policies that could be considered to address this, including tax changes and private rented sector regulation, alongside shared ownership and similar schemes.

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