The Thinkhouse Review: so exactly how many social homes do we need again?

It does this by using the Office of National Statistics (ONS) household formation projections, issued in September 2018. They conclude that the number of households will rise by an average of 159,000 per year to 2041. London, the South-East and the Midlands seeing the highest growth.

However, these latest household formation figures are 51,000 per annum lower than the previous data set issued in 2014 (210,000 per year).

This fall is caused by lower births, less net migration, slower improvements in life expectancy and average household size not declining.

So if the growth in total households is falling and the total housing demand is 159,000 a year why the housing need totals so much higher?

As we all know there is an historic under delivery of housing that needs remedying.

A shortage of supply has led to declining affordability which in turn has the capacity to suppress household formation (e.g. the kids not leaving home).

Crisis and the National Housing Federation (NHF) looked in detail at this in their December report, Housing supply requirements across Great Britain for low-income households and homeless people which presents the findings of a study by Professor Glen Bramley of Heriot-Watt University. The report adds to the existing evidence base on housing need by making an assessment of the existing backlog of unmet housing need and by providing a new methodology for the assessment of housing requirements.

Glen Bramley has produced a hugely detailed bottom up model, flexed for a number of scenarios.

“All these reports clearly explain the necessity of providing more social homes and play an important role in informing the debate”

It starts by using existing data sources to arrive at a total of 4 million English households who are in housing need (according to a range of indicators including affordability, suitability of accommodation, and core and wider definitions of homelessness).

This figure is then adjusted using the household formation figures to address the needs of existing households and allow for new households, adding another 1.1m households.

Finally, the report looks at the mix of tenure to arrive at a forecast of need (in England) of 340,000 homes per annum over the next fifteen years including 90,000 social rent, 25,000 shared ownership and 30,000 intermediate rent.

So how do these figures compare to those in the high-profile Shelter report which states that we need 3.1 million social homes over the next 20 years or 155,000 per annum?

Even by adding the social and intermediate rent figures in the Crisis/NHF report to get 120,000 there is clearly a gap.

“Perhaps different time periods (there is a school of thought that ‘housing need’ more than 15 years out will actually fall) or different definitions of what is a social home may also help reconcile the figures?”

While finer minds than mine will, no doubt, be able to explain this better than I can, it is noticeable that the Shelter report is quite ‘vision driven’ and then produces an estimate of the number of homes to meet this vision.

For example it adds 35,000 social homes per annum to meet the need of old renters struggling in the private rented sector. This area of housing need has less emphasis in the Crisis/NHF report.

Perhaps different time periods (there is a school of thought that ‘housing need’ more than 15 years out will actually fall) or different definitions of what is a social home may also help reconcile the figures?

Of course, when we are building only a handful of new social homes a year, a debate about whether we need to increase this to 90,000, 120,000 or 155,000 feels somewhat academic and there may not be much to be gained by answering the question I set.

Nevertheless, all these reports clearly explain the necessity of providing more social homes and play an important role in informing the debate.

What we really need is the political will and national resources galvanised to increase delivery.

Richard Hyde, chair of the Thinkhouse editorial panel

PS: I have only covered two of the twenty-three reports that were put onto our 2018 page in November to December. If you would like to see what the others were click here.